What do I do when a vendor's name and tax ID don't match IRS records, or I get a notice that a TIN I reported is wrong?

Is this a mismatch you caught, or a notice from the IRS?

After Form 1099 information returns are submitted, the IRS will send the payer a CP2100 or CP2100A Notice together with a listing of incorrect Name/TIN(s) reported on those forms. (jurisdiction: United States (federal tax law administered by the IRS), entity_scope: payers required to file information returns (Forms 1099, W-2G) with the IRS)

“After the submission of Form 1099 information returns, the IRS will send you a CP2100 or a CP2100A Notice and a listing of incorrect Name/TIN(s) reported on those forms.”

If an account on the listing does not agree with the payer's records, this could result from a recent update to SSA records, an error in the information submitted, or an IRS processing error; in that case the payer should only correct or update its records if necessary, and does not have to call or write to the IRS to report the correction. (jurisdiction: United States (federal tax law administered by the IRS), entity_scope: payers required to file information returns (Forms 1099, W-2G) with the IRS, conditions: listed account does not agree with the payer's records)

“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. Remember: You do not have to call or write to the IRS to say that you made the correction or update to your records.”

If the payer reported the incorrect information on the return it corrects its records and includes that information on future information returns, does not send a "B" Notice to the payee, and does not send the correction to the IRS. (jurisdiction: United States (federal tax law administered by the IRS), entity_scope: payers required to file information returns (Forms 1099, W-2G) with the IRS, conditions: listed account information does not agree with the payer's records because the payer reported incorrect information)

“If you reported the incorrect information on the return, correct your records and include that information on any future information returns you file. Do not send a “B” Notice to the payee. Do not send the correction to the IRS.”

Not established from an authoritative source.

What a CP2100 or CP2100A notice says, and the clock it starts

The CP2100 or CP2100A notice asserts that the payee name and taxpayer identification number (TIN) shown on the recipient payer's information return is missing or does not match IRS records. (jurisdiction: United States (federal); Internal Revenue Service information-return and backup withholding rules, entity_scope: Payers who file information returns and receive an IRS CP2100 or CP2100A notice, and their payees)

“The payee's name and taxpayer identification number (TIN) on your information return is missing or doesn’t match our records.”

The CP2100/2100A notice is accompanied by a listing of missing and obviously incorrect TINs, and of incorrect TINs that do not match IRS records. (jurisdiction: United States (federal), entity_scope: payers (a financial institution, business or person) that file certain information returns, conditions: payer has received a CP2100 or CP2100A notice)

“The CP2100/2100A notice is accompanied by a listing of missing and obviously incorrect TINs, and incorrect TINs that don’t match IRS records.”

What you are required to do once the notice arrives

Where a payor receives paragraph (c)(1) or (2) notification twice within 3 calendar years and in each case must identify the same account as having the incorrect name/TIN combination, the payor must disregard any future paragraph (f) certifications furnished by the payee for that account until the payor receives SSA (or IRS) notice validating a name/TIN combination under paragraph (g)(5). (jurisdiction: United States (federal), entity_scope: Payors of reportable payments subject to backup withholding under section 3406 (including brokers acting as payors), effective_from: 1990-09-01, conditions: Section effective with respect to notices received on or after September 1, 1990, except as otherwise provided in the section)

“If a payor receives notification under paragraph (c)(1) or (2) of this section twice within 3 calendar years, and in each case the payor is required to identify the same account as having the incorrect name/ TIN combination, the payor must— (i) Disregard any future certifications (described in paragraph (f) of this section) furnished by the payee with respect to the account until the payor receives notice from the Social Security Administration (or the Internal Revenue Service) validating a name/TIN combination under paragraph (g)(5) of this section;”

Partly established. Established: the obligation a payer incurs on receiving an agency notice that a reported payee identification number is incorrect (S10, S11, S12, S13, S15); the deadline the notice starts (S12, S13, S15). Missing: the required solicitation sequence; the timing of that solicitation sequence.

The response sequence: compare your records, then solicit

The first step listed for a payer that receives a CP2100 or CP2100A notice is to compare the listing(s) accompanying the notice with the payer's own records. (jurisdiction: United States (federal), entity_scope: payers (a financial institution, business or person) that file certain information returns, conditions: payer has received a CP2100 or CP2100A notice)

“Compare the listing(s) with your records.”

The payer must send the First "B" Notice, Form W-9 and an optional reply envelope to the payee within 15 business days from the date of the CP2100/CP2100A Notice or the date it received it (whichever is later), must date the "B" Notice no later than 30 business days after that date, and must clearly mark the outer mailing envelope "IMPORTANT TAX INFORMATION ENCLOSED" or "IMPORTANT TAX RETURN DOCUMENT ENCLOSED". (jurisdiction: United States (federal tax law administered by the IRS), entity_scope: payers required to file information returns (Forms 1099, W-2G) with the IRS, conditions: first notification of an incorrect Name/TIN combination for the account)

“1. Send the First “B” Notice, Form W-9, and an optional reply envelope to the payee within 15 business days from the date of the CP2100/CP2100A Notice or the date you received it (whichever is later). Date the “B” Notice no later than 30 business days after the date of the CP2100/CP2100A Notice or the date you received it (whichever is later). The outer mailing envelope must be clearly marked “IMPORTANT TAX INFORMATION ENCLOSED” or “IMPORTANT TAX RETURN DOCUMENT ENCLOSED.””

The payer must send the Second "B" Notice and an optional reply envelope to the payee within 15 business days after the date of the CP2100/CP2100A Notice or the date it received it (whichever is later), must date the notice no later than 30 business days after that date, and must not send a Form W-9 with it. (jurisdiction: United States (federal tax law administered by the IRS), entity_scope: payers required to file information returns (Forms 1099, W-2G) with the IRS, conditions: second notification of an incorrect Name/TIN combination within three calendar years)

“1. Send the Second “B” Notice and an optional reply envelope to the payee within 15 business days after the date of the CP2100/CP2100A Notice or the date you received it (whichever is later). Date the “B” notice no later than 30 business days after the date of the CP2100/CP2100A Notice or the date you received it (whichever is later). Do not send a Form W-9.”

Partly established. Established: comparing the notice against the payer's own records (S11); then soliciting a corrected certification from the payee (S12). Missing: how many solicitations are required; when each solicitation must be made.

Backup withholding: when it starts, when it stops, what you deposit

After receiving a CP2100 or CP2100A Notice the payer must begin backup withholding on all reportable payments to the payee no later than 30 business days after receiving the notice, and must stop backup withholding within 30 calendar days after receiving the required certification (Form W-9) from the payee or TIN validation from SSA or the IRS if it was a second notification; at its option the payer may start and stop at any time during those 30-day periods. (jurisdiction: United States (federal tax law administered by the IRS), entity_scope: payers required to file information returns (Forms 1099, W-2G) with the IRS, conditions: payer has received a CP2100 or CP2100A Notice)

“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. At your option, you may start and stop backup withholding at any time during these 30-day periods.”

The backup withholding rate is 24%, effective for all subject payments after December 31, 2017. (jurisdiction: United States (federal tax law administered by the IRS), entity_scope: payers required to file information returns (Forms 1099, W-2G) with the IRS, effective_from: after December 31, 2017, conditions: applies to payments subject to backup withholding)

“Rate/Percentage is 24%, effective for all subject payments after December 31, 2017.”

Two deposit schedules, monthly and semiweekly, determine when withheld federal income tax must be deposited after a tax liability arises (that is, when a payment subject to federal income tax withholding, including backup withholding, is made), and the filer must determine before the beginning of each calendar year which of the two schedules applies. (jurisdiction: United States (federal), entity_scope: Payers required to file Form 945 (persons who withhold or are required to withhold federal income tax, including backup withholding, from nonpayroll payments))

“There are two deposit schedules—monthly and semiweekly—for determining when you deposit withheld federal income tax. These schedules tell you when a deposit is due after a tax liability arises (that is, you make a payment subject to federal income tax withholding, including backup withholding). Before the beginning of each calendar year, you must determine which of the two deposit schedules you’re required to use.”

The paragraph (e) backup withholding requirement for an account terminates no later than the close of the third calendar year ending after the later of the date the last reportable payment was made to the account or the date the payor received the paragraph (c)(1) or (2) notice. (jurisdiction: United States (federal), entity_scope: Payors of reportable payments subject to backup withholding under section 3406 (including brokers acting as payors), effective_from: 1990-09-01, conditions: Section effective with respect to notices received on or after September 1, 1990, except as otherwise provided in the section)

“The requirement that a payor backup withhold under this paragraph (e) on reportable payments made with respect to an account terminates no later than the close of the third calendar year ending after the later of— (i) The date that the last reportable payment was made to that account; or (ii) The date that the payor received the notice under paragraph (c)(1) or (2) of this section.”

Partly established. Established: when backup withholding must begin (S15, S19, S62); when backup withholding must stop (S15, S18, S19); the deposit obligations for amounts withheld (S17, S22). Missing: which payments backup withholding reaches; the reporting obligations for amounts withheld.

Which payments backup withholding reaches, and how withheld amounts are reported

Except as provided in paragraph (g), a payor that receives a paragraph (c)(1) or (2) notice and must identify an account under paragraph (c)(3) must impose backup withholding on all reportable payments made with respect to that account after the close of the 30th business day after the date it receives the notice and on or before the close of the 30th calendar day after the day it receives the payee's paragraph (f) certification. (jurisdiction: United States (federal), entity_scope: Payors of reportable payments subject to backup withholding under section 3406 (including brokers acting as payors), effective_from: 1990-09-01, conditions: Section effective with respect to notices received on or after September 1, 1990, except as otherwise provided in the section)

“Except as provided in paragraph (g) of this section, if a payor receives a notice under paragraph (c)(1) or (2) of this section and is required to identify an account as having the same name/TIN combination under paragraph (c)(3) of this section, the payor must impose backup withholding on all reportable payments made with respect to the account after the close of the 30th business day after the date the payor receives that notice and on or before the close of the 30th calendar day after the day the payor receives from the payee the certification required under paragraph (f) of this section.”

Payments that may be subject to backup withholding include, among others, interest, dividends, rents, royalties, commissions, non-employee compensation, broker proceeds and barter exchange transactions, reportable gross proceeds paid to attorneys, and certain payments made by fishing boat operators; the list is stated as inclusive rather than closed. (jurisdiction: United States (federal tax law administered by the IRS), entity_scope: payers required to file information returns (Forms 1099, W-2G) with the IRS)

“Payments that may be subject to backup withholding include interest, dividends, rents, royalties, commissions, non-employee compensation, and other payments including broker proceeds and barter exchange transactions, reportable gross proceeds paid to attorneys, and certain payments made by fishing boat operators.”

All nonpayroll withheld federal income tax reported on Form 945, including backup withholding, must be deposited by electronic funds transfer, which can be made using EFTPS, IRS Direct Pay or the filer's IRS business tax account. (jurisdiction: United States (federal), entity_scope: Payers required to file Form 945 (persons who withhold or are required to withhold federal income tax, including backup withholding, from nonpayroll payments))

“Deposit all nonpayroll (Form 945) withheld federal income tax, including backup withholding, by EFT. An EFT can be made using EFTPS, IRS Direct Pay, or your IRS business tax account.”

Partly established. Established: when backup withholding must begin (S15, S19, S62); when backup withholding must stop (S15, S18, S19); the deposit obligations for amounts withheld (S17, S22). Missing: which payments backup withholding applies to; the reporting obligations for amounts withheld.

Recording the withheld amount on the vendor payment

See All nonpayroll withheld federal income tax reported on Form 945, including backup withholding, must be deposited by electronic funds transfer, which can be made using EFTPS, IRS Direct Pay or the filer's IRS business tax account.

In QuickBooks Online or QuickBooks Desktop, a user can add a line/expense to the check to account for the federal backup withholding. (jurisdiction: United States (federal / IRS backup withholding); US edition of the QuickBooks help site (en-us), entity_scope: QuickBooks Online or QuickBooks Desktop users paying a vendor by check, platform: QuickBooks Online; QuickBooks Desktop, platform_edition: QuickBooks US help article, updated 8/3/2026 22:52, conditions: the withholding is recorded on the check itself, as an added line/expense)

“QuickBooks Online or QuickBooks Desktop : you can add a line/expense to the check to account for the federal backup withholding.”

Where the backup withholding line/expense is added to the check in QuickBooks Online or QuickBooks Desktop, the amount must be entered as a negative amount so that it reduces the total pay to the vendor. (jurisdiction: United States (federal / IRS backup withholding); US edition of the QuickBooks help site (en-us), entity_scope: QuickBooks Online or QuickBooks Desktop users adding a backup-withholding line to a vendor check, platform: QuickBooks Online; QuickBooks Desktop, platform_edition: QuickBooks US help article, updated 8/3/2026 22:52, conditions: applies to the line/expense added to the check for federal backup withholding)

“QuickBooks Online or QuickBooks Desktop : you can add a line/expense to the check to account for the federal backup withholding. The amount must be entered as a negative amount to reduce the total pay to the vendor.”

In QuickBooks Contractor Payments used without QuickBooks accounting, a user cannot collect backup withholding on contractor payments. (jurisdiction: United States (federal / IRS backup withholding); US edition of the QuickBooks help site (en-us), entity_scope: users of QuickBooks Contractor Payments without QuickBooks accounting, platform: QuickBooks Contractor Payments (without QuickBooks accounting), platform_edition: QuickBooks US help article, updated 8/3/2026 22:52, conditions: only where Contractor Payments is used without QuickBooks accounting)

“QuickBooks Contractor Payments without QuickBooks accounting: you can't collect backup withholding on your contractor payments.”

Partly established. Established: splitting the payment between the amount paid to the payee and the amount withheld (S23, S24). Missing: flagging the vendor record to withhold; the liability the withholding creates; the deposit that clears that liability.

Required authority: authoritative professional or accounting standard. Highest achieved: official platform documentation.

Treating the withheld amount as a liability owed to the IRS

Not established from an authoritative source.

Checking a vendor's name and tax ID before returns go out

A valid Form W-9, or a substitute form, must contain the payee’s name and TIN and be signed and dated under penalties of perjury by the payee or a person authorized to sign for the payee; a foreign person — including a U.S. branch of a foreign person treated as a U.S. person under Regulations section 1.1441-1(b)(2)(iv), or a foreign branch of a U.S. financial institution that is a QI — may not provide a Form W-9. (jurisdiction: United States (federal tax administration by the IRS), entity_scope: Requesters (payors) of Form W-9 that are required to file U.S. information returns, and their payees)

“A valid Form W-9, or a substitute form, must contain the payee's name and TIN and be signed and dated under penalties of perjury by the payee or a person authorized to sign for the payee. A foreign person, including a U.S. branch of a foreign person that is treated as a U.S. person under Regulations section 1.1441-1(b)(2)(iv) or a foreign branch of a U.S. financial institution that is a QI, may not provide a Form W-9.”

The TIN provided on Form W-9 must match the name given on line 1 in order to avoid backup withholding. (jurisdiction: United States (U.S. federal tax; Internal Revenue Code) - IRS Form W-9 and its instructions, entity_scope: any payee furnishing a TIN on Form W-9)

“The TIN provided must match the name given on line 1 to avoid backup withholding.”

The IRS TIN Matching service lets a user validate TIN and name combinations before submitting an information return. (jurisdiction: United States (federal); IRS information-return reporting, entity_scope: Users of the IRS TIN Matching service (payers submitting information returns), platform: IRS e-Services / TIN Matching)

“The TIN Matching service lets you validate TIN and name combinations before submitting an information return.”

The requester must show the full name and address as provided on Form W-9 on the information return filed with the IRS and on the copy furnished to the payee. (jurisdiction: United States (federal tax administration by the IRS), entity_scope: Requesters (payors) of Form W-9 that are required to file U.S. information returns, and their payees)

“Show the full name and address as provided on Form W-9 on the information return filed with the IRS and on the copy furnished to the payee.”

Partly established. Established: obtaining a certified name and number from the payee (S26); using the available verification or matching service (S28). Missing: knowing which name is expected for the payee type.

The IRS TIN Matching service: who can use it and what a match means

See The IRS TIN Matching service lets a user validate TIN and name combinations before submitting an information return.

TIN Matching is only for payers and their authorized agents that submit information returns. (jurisdiction: United States (federal); IRS information-return reporting, entity_scope: Payers and their authorized agents that submit information returns, platform: IRS e-Services / TIN Matching)

“TIN Matching is only for payers and their authorized agents that submit information returns.”

To use the TIN Matching service, a payer must be listed in the IRS Payer Account File (PAF) database. (jurisdiction: United States (federal); IRS information-return reporting, entity_scope: Payers seeking to use TIN Matching, platform: IRS e-Services / TIN Matching, conditions: Payer must be listed in the IRS Payer Account File (PAF) database)

“To use this service, a payer must be listed in the IRS Payer Account File (PAF) database.”

Program participants will generally be able to rely on a verified TIN/name match as reasonable cause under section 6724(a), which the instructions say provides significant incentive for payors to check and correct payee TINs before filing information returns and payee statements. (jurisdiction: United States (federal tax administration by the IRS), entity_scope: Participants in the IRS TIN matching program)

“Program participants will generally be able to rely on a verified TIN/name match as reasonable cause under section 6724(a), which will provide significant incentive for payors to check and correct payee TINs before filing information returns and payee statements.”

Partly established. Established: the verification or matching service available to a payer for checking a payee name and identification number against agency records before filing (S28); who may use it (S30, S31). Missing: what its results mean.

Which name and number the IRS expects for each type of payee

See A valid Form W-9, or a substitute form, must contain the payee’s name and TIN and be signed and dated under penalties of perjury by the payee or a person authorized to sign for the payee; a foreign person — including a U.S. branch of a foreign person treated as a U.S. person under Regulations section 1.1441-1(b)(2)(iv), or a foreign branch of a U.S. financial institution that is a QI — may not provide a Form W-9.

A sole proprietor is to enter on line 1 their individual name as shown on their Form 1040, and to enter their business, trade, or “doing business as” (DBA) name on line 2. (jurisdiction: United States (U.S. federal tax; Internal Revenue Code) - IRS Form W-9 and its instructions, entity_scope: sole proprietors)

“• Sole proprietor. Enter your individual name as shown on your Form 1040 on line 1. Enter your business, trade, or “doing business as” (DBA) name on line 2.”

A partnership, C corporation, S corporation, or LLC other than a disregarded entity is to enter on line 1 the entity's name as shown on the entity's tax return, and any business, trade, or DBA name on line 2. (jurisdiction: United States (U.S. federal tax; Internal Revenue Code) - IRS Form W-9 and its instructions, entity_scope: partnerships, C corporations, S corporations, and LLCs other than disregarded entities)

“• Partnership, C corporation, S corporation, or LLC, other than a disregarded entity. Enter the entity’s name as shown on the entity’s tax return on line 1 and any business, trade, or DBA name on line 2.”

A single-member LLC that is disregarded as an entity separate from its owner enters the owner's SSN, or the owner's EIN if the owner has one; if the LLC is classified as a corporation or partnership, the entity's EIN is entered. (jurisdiction: United States (U.S. federal tax; Internal Revenue Code) - IRS Form W-9 and its instructions, entity_scope: single-member LLCs that are disregarded entities, and LLCs classified as corporations or partnerships)

“If you are a single-member LLC that is disregarded as an entity separate from its owner, enter the owner’s SSN (or EIN, if the owner has one). If the LLC is classified as a corporation or partnership, enter the entity’s EIN.”

Partly established. Established: how the payee certification supplies that name and identification number combination (S26, S27). Missing: the name and identification number combination the agency expects for each payee type - individual, sole proprietor operating under a trade name, single-owner entity, corporation, partnership.

Why the mismatch happened, and how to fix it with the vendor

See A sole proprietor is to enter on line 1 their individual name as shown on their Form 1040, and to enter their business, trade, or “doing business as” (DBA) name on line 2.

A payee must furnish a new Form W-9 if the name or TIN changes for the account; the form gives the death of the grantor of a grantor trust as an example. (jurisdiction: United States (U.S. federal tax; Internal Revenue Code) - IRS Form W-9 and its instructions, entity_scope: payees whose account name or TIN changes, conditions: the grantor-trust case is given as an example)

“In addition, you must furnish a new Form W-9 if the name or TIN changes for the account, for example, if the grantor of a grantor trust dies.”

An individual should generally enter on line 1 the name shown on their tax return; if the individual has changed their last name without informing the Social Security Administration of the change, they enter their first name, the last name as shown on their social security card, and their new last name. (jurisdiction: United States (U.S. federal tax; Internal Revenue Code) - IRS Form W-9 and its instructions, entity_scope: individual payees, conditions: the first direction is hedged with “Generally”; the second applies only where the last name changed without informing the SSA)

“• Individual. Generally, enter the name shown on your tax return. If you have changed your last name without informing the Social Security Administration (SSA) of the name change, enter your first name, the last name as shown on your social security card, and your new last name.”

For proper processing, information for a disregarded entity is reported with the owner’s name on line 1 of Form W-9 and the disregarded entity’s name on line 2. (jurisdiction: United States (federal tax administration by the IRS), entity_scope: Payees that are disregarded entities for U.S. federal tax purposes)

“For proper processing, information for disregarded entities is reported as the owner’s name on line 1, and the disregarded entity’s name is entered on line 2.”

Not established from an authoritative source.

Does the return you already filed have to be corrected?

Discovering an error on a paper return already filed with the IRS triggers a correction obligation on the filer. (jurisdiction: United States (federal tax administration), entity_scope: Filers who filed paper information returns with the IRS, conditions: applies to information returns for calendar/tax year 2025, filed in 2026)

“If you filed a paper return with the IRS and later discover you made an error on it, you must:”

A filer who meets the reasonable-cause criteria of Regulations section 301.6724-1 is not required to file corrected returns for missing or incorrect TINs, and is only required to include the correct TIN on the next original return it must file. (jurisdiction: United States (federal tax administration), entity_scope: Filers of Forms 1096, 1097, 1098, 1099, 3921, 3922, 5498, and W-2G, conditions: filer meets the reasonable-cause criteria of Regulations section 301.6724-1; applies to information returns for calendar/tax year 2025, filed in 2026)

“Regulations section 301.6724-1 (relating to information return penalties) does not require you to file corrected returns for missing or incorrect TINs if you meet the reasonable-cause criteria. You are merely required to include the correct TIN on the next original return you are required to file.”

A corrected TIN received from the payee must be included on any future information return filed for that payee; a correction of a return with an incorrect TIN is not required unless a money amount is also being corrected; but an employer should file Form W-2c even where the only purpose is to correct an employee's SSN. (jurisdiction: United States (federal), entity_scope: Persons required to file information returns defined under IRC 6724(d)(1), conditions: corrected TIN received from the payee)

“If a corrected TIN is received from the payee, include it on any future information return filed for that payee. A correction for a return with an incorrect TIN is not required unless also correcting a money amount. However, an employer should file a Form W-2c, Corrected Wage and Tax Statement, even if the employer is only filing Form W-2c to correct an employee’s SSN.”

Even where the reasonable-cause criteria are met, the IRS encourages filers to file corrections for incorrect or missing TINs so payees' records can be updated. (jurisdiction: United States (federal tax administration), entity_scope: Filers of Forms 1096, 1097, 1098, 1099, 3921, 3922, 5498, and W-2G, conditions: applies to information returns for calendar/tax year 2025, filed in 2026)

“However, even if you meet the reasonable-cause criteria, the IRS encourages you to file corrections for incorrect or missing TINs so that the IRS can update the payees' records.”

Partly established. Established: when an identification-data error requires the previously filed return to be corrected (S41). Missing: the correction path the reader is routed to.

The trigger for correcting a filed return that carried wrong payee data

See Discovering an error on a paper return already filed with the IRS triggers a correction obligation on the filer.

See A filer who meets the reasonable-cause criteria of Regulations section 301.6724-1 is not required to file corrected returns for missing or incorrect TINs, and is only required to include the correct TIN on the next original return it must file.

See A corrected TIN received from the payee must be included on any future information return filed for that payee; a correction of a return with an incorrect TIN is not required unless a money amount is also being corrected; but an employer should file Form W-2c even where the only purpose is to correct an employee's SSN.

Errors or omissions relating to a TIN, a payee's surname, or any money amount (subject to the de minimis dollar-amount safe harbor) are never inconsequential, so they cannot fall within the inconsequential-error exception to the section 6721 penalty. (jurisdiction: United States (federal tax administration), entity_scope: Filers of Forms 1096, 1097, 1098, 1099, 3921, 3922, 5498, and W-2G, conditions: applies to information returns for calendar/tax year 2025, filed in 2026)

“Errors and omissions that are never inconsequential are those related to (a) a TIN; (b) a payee's surname; and (c) any money amount except as provided, later, with respect to the safe harbor for de minimis dollar amount errors.”

The penalty for a wrong TIN, and the record that limits it

See Program participants will generally be able to rely on a verified TIN/name match as reasonable cause under section 6724(a), which the instructions say provides significant incentive for payors to check and correct payee TINs before filing information returns and payee statements.

Notice 972CG must be answered within 45 calendar days of the notice date, or 60 calendar days for foreign filers. (jurisdiction: United States (federal), entity_scope: Persons required to file information returns defined under IRC 6724(d)(1), conditions: filer has received Notice 972CG; 60 calendar days applies to foreign filers)

“The notice must be answered within 45 calendar days (60 calendar days for foreign filers) from the notice date.”

A filer seeking a waiver of the proposed penalty must submit a written statement that states the specific provision under which the waiver is requested, sets forth all the facts alleged as the basis for reasonable cause and for the filer having acted in a responsible manner (for example specifying that the applicable initial, first annual or second annual solicitation for each missing or incorrect TIN took place in the time and manner required by the regulations), contains the signature of the person required to file the return, and contains the declaration that it is made under penalties of perjury. (jurisdiction: United States (federal), entity_scope: Persons required to file information returns defined under IRC 6724(d)(1), conditions: filer is seeking waiver of a penalty proposed by Notice 972CG)

“In seeking a waiver of the proposed penalty, the filer must submit a written statement that: 1. States the specific provision under which the waiver is being requested (for example: event beyond filer’s control), see Treas. Reg. 301.6724-1(b) and (c), 2. Sets forth all the facts alleged as the basis for reasonable cause and that the filer acted in a responsible manner (for example: specifies that the applicable solicitation (initial, first annual, second annual, etc.) for each missing/incorrect TIN took place in the time and manner required by regulations. See part VI for more information on TIN solicitation rules, as well as Treas. Reg. 301.6724-1(e) & (f)), 3. Contains the signature of person required to file the return, and 4. Contains the declaration that it is made under penalties of perjury.”

Sending a "B" Notice to a payee in response to a CP2100A or CP2100 Notice satisfies the annual solicitation requirement for avoiding a penalty for filing an information return with an incorrect TIN. (jurisdiction: United States (federal tax law administered by the IRS), entity_scope: payers required to file information returns (Forms 1099, W-2G) with the IRS)

“Sending a “B” Notice to a payee in response to a CP2100A or CP2100 Notice satisfies the annual solicitation requirement in order to avoid a penalty for filing an information return with an incorrect TIN.”

Penalty amounts and the reasonable-cause standard

IRC 6721 imposes a penalty per return for each of the listed failures relating to information returns defined under IRC 6724(d)(1), one of which is filing with a missing or incorrect TIN. (jurisdiction: United States (federal), entity_scope: Persons required to file information returns defined under IRC 6724(d)(1))

“IRC 6721, Failure to file correct information returns, imposes a penalty per return for each of the following failures related to information returns defined under IRC 6724(d)(1): • Failure to file, • Filed with a missing/incorrect TIN (or other missing or incorrect information), • Filed untimely, • Filed on paper when electronic filing was required (incorrect media), • Filed in an incorrect format, (unprocessable), or • Any combination of the above.”

To show that a failure to include a correct TIN was due to reasonable cause and not willful neglect, the filer must establish both that it acted in a responsible manner before and after the failure and either that there were significant mitigating factors (for example an established history of filing information returns with correct TINs) or that the failure was due to events beyond the filer's control (for example actions of the payee or any other person). (jurisdiction: United States (federal), entity_scope: Persons required to file information returns defined under IRC 6724(d)(1))

“To show that the failure to include a correct TIN was due to reasonable cause and not willful neglect, filers must establish both that they acted in a responsible manner both before and after the failure occurred and that: • There were significant mitigating factors with respect to the failure (for example, an established history of filing information returns with correct TINs), or • The failure was due to events beyond the filer’s control (for example, actions of the payee or any other person).”

Except as otherwise stated in the publication, acting in a responsible manner for missing and incorrect TINs generally includes making an initial solicitation for the payee's name and TIN and, if required, annual solicitations. (jurisdiction: United States (federal), entity_scope: Persons required to file information returns defined under IRC 6724(d)(1))

“Except as otherwise stated in this publication, acting in a responsible manner for missing and incorrect TINs generally includes making an initial solicitation (request) for the payee’s name and TIN and, if required, annual solicitations.”

What to keep on file for this episode

Where this is the first notification and the Form W-9 is returned with the same incorrect information, the payer keeps the Form W-9 on file to show the payee certified the Name/TIN combination and does not backup withhold. (jurisdiction: United States (federal tax law administered by the IRS), entity_scope: payers required to file information returns (Forms 1099, W-2G) with the IRS, conditions: first notification; Form W-9 returned with the same incorrect information)

“Keep the Form W-9 on file to show that the payee certified the Name/TIN combination. Do not backup withhold.”

If a "B" Notice is returned as undeliverable the payer must begin backup withholding, should try to obtain the correct address and remail the notice, and if it cannot find the correct address must keep the undelivered notice with its records for three years to track the two-in-three-year rule, or until it has obtained a valid address. (jurisdiction: United States (federal tax law administered by the IRS), entity_scope: payers required to file information returns (Forms 1099, W-2G) with the IRS, conditions: "B" Notice returned as undeliverable)

“You must begin backup withholding. However, try to get the correct address for the payee and remail the notice. If you cannot find the correct address, keep the undelivered notice with your records for a period of three years, in order to track the “two-in-three-year” rule (see Question 13) or, until you have obtained a valid address.”

The payor must maintain sufficient records to determine whether it has received paragraph (c)(1) or (2) notices twice within 3 calendar years with respect to the same account. (jurisdiction: United States (federal), entity_scope: Payors of reportable payments subject to backup withholding under section 3406 (including brokers acting as payors), effective_from: 1990-09-01, conditions: Section effective with respect to notices received on or after September 1, 1990, except as otherwise provided in the section)

“The payor must maintain sufficient records to determine whether the payor has received notices under paragraph (c) (1) or (2) of this section twice within 3 calendar years with respect to the same account.”

Copies of the TIN solicitations are not to be submitted with the response to Notice 972CG unless they are requested. (jurisdiction: United States (federal), entity_scope: Persons required to file information returns defined under IRC 6724(d)(1), conditions: responding to Notice 972CG)

“Do not submit copies of the TIN solicitations unless requested.”

Partly established. Established: the payee certification retained for the episode (S51). Missing: each solicitation with its date retained for the episode; the notice retained for the episode; the withholding record retained for the episode; any corrected filing retained for the episode.

How long these records must be kept

Except as otherwise provided in the sentence that follows it, every person required by the regulations in 26 CFR part 31 to keep records in respect of a tax — whether or not that person incurs liability for the tax — must maintain those records for at least four years after the later of the due date of the tax for the return period to which the records relate or the date the tax is paid. (jurisdiction: United States (federal), entity_scope: every person required by the regulations in 26 CFR part 31 to keep records in respect of a tax, whether or not that person incurs liability for the tax, conditions: subject to the exception stated in the following sentence (records of claimants under paragraph (c)))

“(2) Except as otherwise provided in the following sentence, every person required by the regulations in this part to keep records in respect of a tax (whether or not such person incurs liability for such tax) shall maintain such records for at least four years after the due date of such tax for the return period to which the records relate, or the date such tax is paid, whichever is the later.”

Every person who is required, by the regulations in 26 CFR part 31 or by instructions applicable to any form prescribed under them, to keep a copy of a return, schedule, statement or other document must keep that copy as part of his records. (jurisdiction: United States (federal), entity_scope: every person required by the regulations in 26 CFR part 31, or by form instructions thereunder, to keep a copy of a return, schedule, statement or other document)

“(b) Copies of returns, schedules, and statements. Every person who is required, by the regulations in this part or by instructions applicable to any form prescribed thereunder, to keep any copy of any return, schedule, statement, or other document, shall keep such copy as a part of his records.”

In general an annual solicitation under IRC 6724 may be made by telephone if the procedure is designed and carried out in a manner conducive to obtaining the payee's TIN, though telephone solicitations do not apply for missing or incorrect TINs on certain forms such as Forms 1098-E and 1098-T; such a solicitation may be conducted by calling each payee with a missing or incorrect name/TIN combination and speaking to an adult member of the household or an officer of the business or organization, requesting the TIN, informing the payee of the $50 penalty under IRC 6723 if the TIN is not provided, maintaining contemporaneous records showing that the solicitation was properly made, and providing those records to the IRS if requested. (jurisdiction: United States (federal), entity_scope: Payers making annual TIN solicitations by telephone, conditions: telephone solicitation not available for missing or incorrect TINs on certain forms such as Form 1098-E and Form 1098-T)

“In general, an annual solicitation pursuant to IRC 6724 may be made by telephone if the solicitation procedure is designed and carried out in a manner that is conducive to obtaining the payee’s TIN. However, telephone solicitations do not apply for missing or incorrect TINs on certain forms such as Form 1098-E and Form 1098-T. A telephone solicitation may be conducted by: 1. Calling each payee with a missing or incorrect name/TIN combination and speaking to an adult member of the household, or to an officer of the business or organization, 2. Requesting the payee’s TIN, 3. Informing the payee of the $50 penalty under IRC 6723 if the TIN is not provided, 4. Maintaining contemporaneous records showing that the solicitation was properly made, and 5. Providing the records to the IRS, if requested.”

An electronic system used for initial TIN solicitations must generally meet the listed requirements, including ensuring the information received is the information sent and documenting all occasions of user access resulting in a submission, requiring an authenticating electronic signature by the payee as the final entry, and being able to supply a hard copy of the electronic Form W-4, W-9 or W-9S if the IRS requests it. (jurisdiction: United States (federal), entity_scope: Requesters using an electronic system for initial TIN solicitations)

“Generally, the electronic system must: 1. Ensure the information received is the information sent and document all occasions of user access that result in the submission. 2. Be reasonably certain the person accessing the system and submitting the form is the person identified on the Form W-4, W-9 or W-9S. 3. Provide the same information as required by the paper Form W-4, W-9 or W-9S. 4. Require as the final entry in the submission to the requester an electronic signature by the payee whose name is on the Form W-4, W-9 or W-9S that authenticates and verifies the submission. 5. Be able to supply a hard copy of the electronic Form W-4, W-9 or W-9S if requested by the IRS. 6. For Forms W-4, the signature must be under penalty of perjury. The electronic system must inform the employee that he or she must make a declaration contained in the perjury statement and that the declaration is made by signing the Form W-4. See Treas. Reg. 31.3402(f)(5)-1(c)(2)(iv) for more information. 7. For Forms W-9 and W-9S that are required to be signed, the electronic system must provide for an electronic signature and a penalty of perjury statement.”

Partly established. Established: the retention obligation for agency notices (S53). Missing: the retention obligation for payee certifications; the retention obligation for solicitation records; the retention obligation for backup withholding records; the retention obligation for any corrected information return filed because the payee identification data first reported was wrong.

Changing the vendor record and the payment workflow going forward

If a payor does not collect backup withholding from affected payees as required, the payor may become liable for any uncollected amount. (jurisdiction: United States (federal tax administration by the IRS), entity_scope: Payors of reportable payments required to file U.S. information returns)

“Backup withholding liability. If you don’t collect backup withholding from affected payees as required, you may become liable for any uncollected amount.”

A requester may incorporate a substitute Form W-9 into other business forms it customarily uses, such as account signature cards. (jurisdiction: United States (federal tax administration by the IRS), entity_scope: Requesters (payors) of Form W-9 that are required to file U.S. information returns, and their payees)

“You may incorporate a substitute Form W-9 into other business forms you customarily use, such as account signature cards.”

Requesters may establish a system for payees and payees’ agents to submit Forms W-9 electronically, including by fax. (jurisdiction: United States (federal tax administration by the IRS), entity_scope: Requesters (payors) of Form W-9 that are required to file U.S. information returns, and their payees)

“Requesters may establish a system for payees and payees' agents to submit Forms W-9 electronically, including by fax.”

The 60-day exemption from backup withholding does not apply to any payment other than interest, dividends, and certain payments relating to readily tradable instruments; any other reportable payment, such as nonemployee compensation, is subject to backup withholding immediately, even if the payee has applied for and is awaiting a TIN. (jurisdiction: United States (federal tax administration by the IRS), entity_scope: Payors of reportable payments required to file U.S. information returns)

“The 60-day exemption from backup withholding does not apply to any payment other than interest, dividends, CAUTION and certain payments relating to readily tradable instruments. Any other reportable payment, such as nonemployee compensation, is subject to backup withholding immediately, even if the payee has applied for and is awaiting a TIN.”

A “Needs info” message under the Address or EIN/SSN columns means the recipient is missing critical info for their 1099, and the user is told to follow the steps to invite that vendor to provide the info in a W-9. (jurisdiction: United States, entity_scope: QuickBooks Online users reviewing the recommended 1099 recipient list, platform: QuickBooks Online, platform_edition: QuickBooks US English help article (en-US), Updated 8/5/2026)

“The message under the Address or EIN/SSN columns means they are missing critical info for their 1099. Follow the steps to invite your vendor to provide the info in a W-9.”

Partly established. Established: the going-forward changes to the vendor master (S04). Missing: the going-forward changes to the payment workflow; the control that stops a payee being paid before a usable certification exists.