What Letter 686-B is
Confirms the one-time 30-day extension to respond to Letter 6112 or 6112-A. The extension is always 30 days from the original due date, even if you asked for fewer, and there is no second one (IRM 4.19.26.10.5).
Where this sits: these notices come from the Form 945 side of the house, the return on which backup withholding is reported and deposited. The Form 945 page covers the account mechanics behind them.
The deadline
The new date on the letter.
What to do
Use the time to gather dated W-9s and, where needed, Forms 4669; an incomplete response after the extension goes straight to assessment.
What the compliance check is looking for
Letter 686-B only exists because of Letter 6112. The backup withholding compliance check starts when the IRS matches the Forms 1099 a payer filed with no payee TIN against the payer's Form 945, and finds either no return or a return that reports less withholding than 24 percent of the amounts on those 1099s. Letter 6112 asks the payer to show, payee by payee, why no backup withholding was due: a W-9 or other TIN certification dated on or before the payment, or evidence that the tax was deposited and reported. Where the payer cannot, Letter 6112-A follows with a Form 945 the IRS has prepared from the 1099 amounts.
The one-time 30-day extension that Letter 686-B confirms is the only extra time in the process. The manual fixes it at 30 days from the original response date regardless of how many days were requested, and a second request is not granted. After the extended date, an incomplete response is treated as no response and the proposed Form 945 is assessed.
How to use the 30 days
Work the payee list in three piles. For payees who did give you a TIN before payment, pull the signed W-9 or the TIN Matching record with its date; a W-9 received after the payment date does not excuse withholding on that payment. For payees who never gave you a TIN but did report and pay tax on the income, obtain a Form 4669 from each and attach them to a Form 4670; that relieves the payer of the tax, though not of any penalty or interest. For everything else, compute the 24 percent and decide whether to agree to the proposed Form 945 or to file your own. The compliance check guide covers the 4669 route and the Form 945 mechanics; the missing-TIN exposure calculator estimates the bill.
Questions about Letter 686-B
Who receives Letter 686-B?
Payer. Confirms the one-time 30-day extension to respond to Letter 6112 or 6112-A.
What is the deadline on Letter 686-B?
The new date on the letter.
What should I do when Letter 686-B arrives?
Use the time to gather dated W-9s and, where needed, Forms 4669; an incomplete response after the extension goes straight to assessment.
Is Letter 686-B about my own income tax?
No. This decoder covers information reporting and withholding: the notices a payer, filer or payee sees because of Forms 1099, W-2, 945 and the TINs on them. Individual income-tax notices follow a different track.
Have a different notice? The IRS notice decoder lists all 77 in the order they tend to arrive.