Letter 2625-C: when the IRS asks a payer to verify a 1099 in a payee's underreporter case

What triggers the letter

A payee who disputes a return on a CP 2000 or CP 2501 is sent to the payer first: "inform the taxpayer to contact the payers in dispute. If the taxpayer requests the payer address, provide the address from the IR on the Case Analysis screen" (IRM 4.19.3.23.2.4(9), Oct. 10, 2025). A payee who never received the form is told "they are responsible for reporting all taxable income received" and gets Letter 2626-C paragraph L telling them "they will need to contact the payer" (IRM 4.19.3.23.9.1(5)).

The IRS writes to you only at the next step. When the payee says they "attempted to contact the disputed payer, but the issue wasn't resolved (the payer did not respond or refused to provide information)" and still disputes, the examiner sends Letter 2626-C paragraph M with Form 2624, Consent for Third-Party Contact (IRM 4.19.3.23.9.1(7), Oct. 10, 2025). "Payer contacts will only be made when the taxpayer returns a completed Form 2624 ... for the disputed payer" (IRM 4.19.3.23.9.6(1)).

The screening table for a payee who "disclaims knowledge of the income or disputes the amount" has a redacted first condition and a visible second one: "The IR was NOT TIN PERFECTED" (IRM 4.19.3.23.9.1(6), Oct. 10, 2025); a return the IRS had to repair is handled differently, and how is not stated. Two payers never get the letter: the IRS's own EIN 38-1798424 on a 1099-INT for credit interest ("DO NOT issue a Letter 2625-C," IRM 4.19.3.23.5.2(1)) and the Social Security Administration (IRM 4.19.3.23.9.6(3) Reminder).

Why it came to your IRS address

The examiner researches "IDRS CC INOLE or ENMOD to obtain the employer/payer address" (IRM 4.19.3.23.9.6(3), Oct. 10, 2025); the step when none is found is redacted. The letter goes to your entity address of record, not necessarily the payer address printed on the 1099, so a registered agent, former headquarters or payroll provider may receive it. Because it is a third-party contact, "Per RRA 98 IRC 3417, third-party contact requirements must be followed whenever a Letter 2625-C is sent to a third-party" (the manual's wording; IRM 4.19.3.23.9.6(2)), and a Form 12175, Third-Party Contact Report Form, is uploaded systemically or, for a manually issued letter, "must be manually completed and forwarded to the designated Third-Party Coordinator."

What is in the envelope

The examiner is told to "select paragraph D and ensure the correct SSN is input in the '07' fill-in field" (a caution calls this "imperative to prevent unauthorized disclosure"), to "Always select paragraph 'P' and enter 'Signed Form 2624' in the fill-in field," to select paragraph S with the SSN, and to "Print a copy of the completed Form 2624 and include as an enclosure to Letter 2625-C" (IRM 4.19.3.23.9.6(4), Oct. 10, 2025). So you receive the payee's SSN, a copy of the signed consent, and a request to say whether the income you reported belongs to that SSN and in what amount. The letter body is not reproduced in the manual, and no payer deadline is stated; the 30-day (45 for foreign addresses) response paragraph the manual describes is for letters to taxpayers (IRM 4.19.3.23.10(8)).

The 60-day promise to the payee

As the letter goes out, the payee is told "we are contacting the payer and will contact them again within 60 days" (IRM 4.19.3.23.9.6(5), Oct. 10, 2025). That is the working deadline: the case waits for you, and the no-response checklist says "If a Letter 2625-C (payer contact letter) was issued to the payer and no response was received, see IRM 4.19.3.23.9.6, Payer Contacts" (IRM 4.19.3.22.1(13)).

What happens to your answer

Your written answer is forwarded to the payee unless you are an individual claiming reprisal; write it for that reader.

For wages, the examiner prepares Form 9409 to SSA when a Wage IR is deleted, unless "The employer indicates that the information has been corrected with SSA (Form W-2 C ...)" (IRM 4.19.3.23.9.4(6), Oct. 10, 2025); say whether a W-2c was filed.

What the manual says about not answering

Nothing in this section refers a non-responding payer for a penalty, a Payer Agent review or compliance follow-up; silence resolves the payee's case, and the redacted actions sit beside notes about no-change closures and revised notices. It is still a poor choice: a return dropped this way leaves your payee's records and the IRS's picture of them inconsistent, and a pattern is what the Payer Agent coordinator looks for, at "four or more cases with the same EIN" (IRM 4.19.3.6.2(1), Nov. 20, 2017). An oral answer counts: "Accept oral statements from the taxpayer or a third-party which result in revising or closing a case as No Change" (IRM 4.19.3.23.2.4(20)), but only a written one reaches the payee.

Closed cases: RECON and the 60-day suspense

A payee can raise the dispute after assessment through AUR Reconsideration. The prerequisites repeat: a signed Form 2624 and third-party contact procedures, and first "make sure the information was not verified during the original AUR case processing" (IRM 4.19.3.27.9(1), Oct. 10, 2025). The case is then held: "Suspend for 60 days," under code IPC 9L, "ONLY used for Payer letters (Letter 2625-C)" (IRM 4.19.3.27.3.2 Caution). What happens "If the payer doesn't respond within the 60 day suspense" is redacted, followed by cross-references to full or partial adjustment determinations. "Corrected document" was an enumerated ground for reversing an assessment (Exhibit 4.19.3-13, Issue Code 4), so this letter, or a payee's request for a corrected form, can arrive years after filing. A prior-year Letter 2625-C response attached to the next return deletes the current-year return from the same payer for the same income type (IRM 4.19.3.5.2(16), Feb. 23, 2024).

How to answer

1. Match the SSN on the letter to your records, not the name alone; compare it with the payee's W-9.
2. Take one of four positions: confirmed as filed; a different amount, with a corrected return; not paid to that SSN, with the name and TIN you did pay if known; or nominee, where you paid an agent for someone else. The reply template has all four.
3. If the amount was wrong, file the correction and enclose it. The revised notice carries "the amount of income the payer provided," and the notice cannot otherwise change (IRM 4.19.3.23.9.6(6), (8)). File it against the same account number and income type as the original or the matching program adds rather than replaces (IRM 4.19.3.5.1(11)-(13)); see the corrections page.
4. Say whether the same facts apply to the following year; the manual attaches your response to that year's return (IRM 4.19.3.23.9.7).
5. Enclose the letter, the payment schedule and the W-9, no originals, written for the payee as well as the examiner.
6. Answer inside 60 days, to the address on the letter, and keep a copy with the payee's file.

The payee's CP 2000 response has its own 30-day clock; the payee CP2000 guide covers what you can give them. Disclosure runs one way: examiners "SEND NO TAX INFORMATION TO, OR DISCUSS TAX INFORMATION WITH AN UNAUTHORIZED PERSON" (IRM 4.19.3.23.1.21(1), Oct. 10, 2025), so expect no discussion of the payee's case beyond the verification asked.

Questions people ask