Why you got it
Every January, companies report what they paid you to the IRS on a Form 1099, with your name and your taxpayer identification number (TIN): a Social Security number, an ITIN, or an Employer Identification Number. The IRS matches each name/TIN pair against its records. When a pair doesn't match, the IRS sends the company a list, and the company is required by law to send you this letter within 15 business days and to ask you to correct the record. The letter should say whether it is a First or Second B-Notice, and the two require different things from you.
You have 30 business days from the date the company mailed the letter. If the company doesn't have what it needs by then, it must withhold 24% of every payment it makes to you until it does. The withheld money isn't lost; it's credited to your income tax when you file. But it is a cash-flow hit you can avoid with one form.
If it's a First B-Notice: send a W-9
Fill out the Form W-9 enclosed with the letter (or from irs.gov/w9) and return it to the company the way the letter says, usually a secure upload link, an email address, or a mailing address. What matters is line 1 and the TIN box, and they have to go together:
| You are… | Line 1 (name) | TIN | Line 2 |
|---|---|---|---|
| An individual paid personally | Your name as on your Social Security card | Your SSN | Blank |
| A sole proprietor or single-member LLC using your SSN | Your own name, not the business name | Your SSN | Business or DBA name |
| A sole proprietor with an EIN for the business | Your own name | The EIN (or your SSN; either matches) | Business name |
| A corporation, partnership, multi-member LLC, trust or estate | The legal name on the IRS notice that assigned the EIN (CP 575 or Letter 147C) | The entity's EIN | Trade name, if any |
Sign and date it. An unsigned W-9 doesn't count. Keep a copy and note the date you sent it.
If it's a Second B-Notice: get an SSA card copy or Letter 147C
A Second B-Notice means the IRS flagged your account twice within three years. The law no longer lets the company accept a W-9 from you; you have to get the number validated by the agency that issued it.
- If your TIN is a Social Security number: send the company a copy of your Social Security card. If the name on your card is out of date (marriage, divorce), contact the SSA first (ssa.gov or 1-800-772-1213), update it, and send a copy of the new card. The letter may say the card must be dated within the last six months or show a different name/number from the one on file.
- If your TIN is an EIN: call the IRS Business & Specialty Tax Line at 1-800-829-4933 and ask for Letter 147C, which confirms the legal name and EIN the IRS has on file for your business. The IRS will mail or fax it to the address or number it has for you. Send a copy to the company.
Do this promptly; the IRS line has hold times, and the 30-business-day clock doesn't stop for them.
The three mistakes that cause most notices
- Business name with a personal SSN. "Riverside Landscaping" on line 1 with your SSN will never match, because the IRS knows that SSN as you, not as Riverside. Put your name on line 1 and Riverside on line 2.
- Old name. You changed your name and told the bank but not the SSA, or your company changed its legal name and kept the EIN. The IRS still has the old one. Fix it at the source (SSA for individuals; Form 8822-B for businesses) and send the W-9 with the name the IRS will recognize.
- A typo. A transposed digit is often another real TIN, which is why the IRS reports a mismatch rather than an invalid number. Check the number on the W-9 against your card or IRS letter digit by digit.
What happens if you ignore it
The company is required to withhold 24% of your payments starting 30 business days after the notice, and it can't refund what it withholds; you claim it as a credit on your tax return, which means waiting until you file to see the money. The withholding continues until you send the W-9 or validation, however long that takes. Nothing about the notice affects your tax return, creates a penalty for you, or goes on any record; the only consequence is the cash-flow one, and it's avoidable.
Questions payees ask
Is this letter legitimate, or a scam?
B-Notices are real and required by IRS rules. Check that it comes from a company that actually pays you and that it asks you to send the form back to that company, not to a third party or an unfamiliar address. Never send a W-9 in reply to an email you can't verify; call the company's known number and ask.
Do I owe money?
No. The notice asks for a corrected form. Money is only involved if you don't respond and the company has to withhold, and that money is credited to your taxes.
I already sent a W-9 last month. Why did I get this?
The company may have filed its 1099 before your new W-9 was processed, or the new W-9 has the same problem as the old one (usually the name on line 1). Call the company and ask which name and TIN they have on file.
The company withheld 24% from my last payment. Can I get it back?
Not from the company; once deposited with the IRS it can only be claimed on your tax return. It will show in box 4 of your 1099. Sending the corrected form stops further withholding.
I'm a foreign person or company. Should I fill out a W-9?
No. Foreign payees use a Form W-8 (W-8BEN for individuals, W-8BEN-E for entities). If you received a B-Notice as a foreign payee, tell the company; it likely filed the wrong form type for you.