An IRS employee is asking about one of your payees: what you have to answer, and how to know the call is real

Why the IRS calls a payer

Most calls come from Return Integrity Verification Operations, the unit that holds individual refunds while it checks the income documents behind them. Its manual lists the documents it verifies, "Form W-2," "Form W-2G," "Form 1099-R," and Form 4852, and notes "The list is not all inclusive" (IRM 25.25.3.2, July 10, 2025). The first step is never a call: "RIVO does not call employers unless directed by an OAR or other RIVO IRM program procedures when all other research for verifying the taxpayer's submitted correspondence has been completed" (IRM 25.25.3.2; 25.25.3.3). The research is IRPTR, the file of information returns payers filed. If the W-2 or 1099 you filed matches what the payee claimed, no one calls. A call means the document the payee submitted and the one you filed do not agree, or yours is not there.

The other common sources are a revenue officer collecting from the payee, an examiner auditing the payee's return, or an examiner auditing you and asking about your contractors. The rules below apply to all of them, with the differences noted.

How to know the call is real

The verification caller is required to confirm three things before discussing a payee: your EIN, your business name, and "The company representative's position or relationship to the company" (IRM 25.25.3.6.1, June 14, 2023). The script anticipates reluctance and gives the caller a safe way to prove knowledge of your account: they state the last four digits of your EIN and ask you to confirm the first five. You give up nothing by playing that out. A caller who asks you to read your full EIN, your bank details, or anything about your own tax account is not running this script. If asked why they are calling, the manual's answer is "you are reviewing income and withholding information reported on the income document," and if asked whether the IRS already has the form, "let them know this is an accuracy check of the data" (IRM 25.25.3.6.1).

Two more facts help. The caller works from a phone number already on file for your EIN; if there is none, they research one and may reach a switchboard (IRM 25.25.3.6.2). And the IRS never asks a payer to pay anything on a verification call; the subject is the payee's document, not your money. A demand for payment, or a threat, means it is not this call.

The IRS's own call-centre manual confirms the practice from the receiving end. Verification staff "must contact employers via phone and/or fax to confirm the validity of income and/or income tax withheld that is reported on income documents (Form W-2, Form W-2G, Form 1099, etc.)," a fax "consists of: A cover sheet with the Department of Treasury/IRS Seal. A Department of Treasury/IRS letter. One or more sheets listing various employees for which income and/or withholding needs to be verified," and assistors who are asked "whether the IRS sends faxes or makes phone calls to verify wages, income and/or federal withholding for employees" are told to "advise the caller that these are legitimate inquiries" (IRM 21.1.3.24, Oct. 3, 2022). A payer that wants to confirm before answering can call the IRS business line and ask exactly that question.

What you must answer, and what you may

Nothing requires you to answer an informal question about a payee. Most payers do, because the alternative for the payee is a refund held for months while the IRS marks the document "Unable to Verify," and because the information requested is what you already reported to the IRS. The manual gives you three ways to cooperate at the level you choose. You can verify over the phone. You can ask for "a one-time fax" of the request and answer in writing to a secure fax number, which is the sensible route for anyone who wants a record (IRM 25.25.3.6.1). Or you can confirm only "if the person actually worked there" and "the employment dates" without discussing figures, which the IRS records as "Employment Only" (IRM 25.25.3.6.1). You can also ask that a named person handle these requests, or that they come on a set day; the manual tells the caller to record such instructions permanently against your EIN.

What you disclose is your own return information as well as the payee's: a W-2 or 1099 "is considered the return information of both the payor and the payee" (IRM 11.3.2.5.3, Sept. 17, 2020). Confirming to the IRS what you filed with the IRS is not a disclosure problem. Volunteering other things about the payee, their address, their other income, your opinion of them, is beyond what is asked and beyond what the payee consented to by working for you. Answer the question about the document.

If you do not call back or cannot be reached after "Two or more contacts," the IRS closes the attempt as unable to verify (IRM 25.25.3.6.2, July 10, 2025). The consequence falls on the payee, not on you; the IRS has no penalty for a payer who declines an informal request. It does have a summons.

What the payee was owed first

IRC 7602(c) and the regulation define a third-party contact as a communication "initiated by an IRS employee," "made with a person other than the taxpayer," "with respect to the determination or collection of a tax liability of such taxpayer," that "Discloses the taxpayer's identity" and the IRS connection (IRM 25.27.1.2, May 6, 2026). A call to you about a payee's return is one. Before the first such contact the IRS "Must not contact any third party without first providing the advance third party contact notification to the taxpayer," must specify "the time period, not to exceed one year," and "Must send the notice at least 45 days before the first contact" (IRM 25.27.1.3). Since August 15, 2019, "Publication 1 no longer satisfies the advance notice requirement"; the notice is Letter 3164, in more than twenty versions (IRM 25.27.1.3.1).

The payee cannot stop the contact by withholding consent: "The taxpayer may not prevent an IRS employee from contacting a third party by refusing to provide authorization" (IRM 25.27.1.3.5). What the payee can do is ask for the list. "A taxpayer can request a list of TPCs at any time," orally or in writing, once every 90 days, and the IRS answers with Letter 3173 listing every contact other than those withheld for fear of reprisal (IRM 25.27.1.5). So if a vendor asks you whether the IRS called about them, the honest answer is that you can tell them what you were asked and what you said, and that they can get the IRS's own record of the contact.

There are exceptions to the notice. Where the IRS employee believes telling the taxpayer "may result in a reprisal" against the third party, no notice is given and the contact is left off the list (IRM 25.27.1.3.3); the same for jeopardy, pending criminal investigations and contacts with government entities (IRM 25.27.1.3.2). A payer that fears retaliation from a payee for answering can say so; the manual tells the employee to note it and protect the source.

The contacts that are not requests

A levy. A Form 668-A or 668-W naming your vendor is not a question. IRC 6332 requires you to turn over what you owe the vendor up to the amount on the levy, discharges you from liability to the vendor for what you pay, and makes you liable for the amount plus a 50% penalty if you refuse. If you refuse, the revenue officer explains those provisions, then serves "Form 668-C, Final Demand for Payment," by certified mail or in person, and allows "5 days to respond ... before taking action to enforce IRC 6332" (IRM 5.11.2.2.9, Aug. 1, 2025). The vendor levy page covers the forms, the 21-day rule and what to tell the vendor.

A demand to see records. When a levy is served or about to be, "Records about taxpayer property must be provided, if requested by the IRS" under IRC 6333; the revenue officer uses "Letter 6097, Notice to Exhibit Books and Records," and is told "Do not describe Letter 6097 as a summons" (IRM 5.11.2.2.8, Dec. 21, 2020). This is a statutory duty limited to records about the taxpayer's property in your hands, and it exists only alongside a levy.

A summons. A summons under IRC 7602 compels production of records or testimony about the payee on a date certain, and it is the step the verification manual names as the one that makes answering mandatory. A summons to a third-party recordkeeper carries its own notice to the taxpayer under IRC 7609, and the payee has the right to move to quash it. Comply on the return date, produce what is described and nothing more, and keep a copy of what you produced.

An examination of you. When the IRS is auditing your business and asks about your contractors, the third-party contact rules protect the contractors, not you, and your duty to answer comes from your own examination. Section 530, the Classification Settlement Program and the backup withholding examination are covered in their own guides.

What to keep

A short note in the payee's file: the date, the caller's name and badge or identification number, the number they called from and the one they gave to call back, what was asked, what was answered, and whether you used the fax route. If the caller authenticated by the EIN digit check, note that. The verification manual records the name and title of the person who answered on the IRS side (IRM 25.25.3.7, July 10, 2025); your record should mirror it. If the payee later asks, or if the IRS later questions your 1099, the note is the answer.

The information the call tests is the information you filed. A payer whose 1099s were filed on time, under the right TIN, with the right box 4 figure, has an easy call: the document on IRPTR matches, and the call usually never happens. The IRPTR guide shows what the IRS is looking at.

Questions people ask