Letter 2625-C payer reply

Template from tincompliance.com. Letter 2625-C is sent by the IRS individual underreporter (AUR) unit to a payer when a payee disputes one of the payer's information returns in a CP 2000 or CP 2501 case. The manual permits the letter only after the payee has tried the payer and signed Form 2624, Consent for Third-Party Contact, one per disputed payer (IRM 4.19.3.23.9.1(7)-(8), 4.19.3.23.9.6(1), Oct. 10, 2025). The letter goes to the payer's IRS address of record, carries the payee's SSN, and encloses a copy of the signed consent (IRM 4.19.3.23.9.6(3)-(4)). The payee is told the IRS will recontact them within 60 days (IRM 4.19.3.23.9.6(5)); answer inside that window. The IRS forwards the payer's written reply to the payee with Letter 2626-C paragraph O (IRM 4.19.3.23.9.6(6)), so write it for both readers.

[Payer legal name]

EIN: [00-0000000]

[Address of record with the IRS]

[Date]

Internal Revenue Service

Automated Underreporter

[Address shown on Letter 2625-C]

Re: Letter 2625-C dated [date]; taxpayer [name as shown on the letter], SSN [as shown on the letter]; tax year [year]; Form [1099-NEC / 1099-MISC / 1099-INT / 1099-DIV / 1099-R / 1099-K / W-2 / other]; account number [as shown on the information return]

Dear Sir or Madam:

[Payer] has received your Letter 2625-C and the enclosed copy of the taxpayer's signed Form 2624. We have compared the information return identified above with our payment records and the Form W-9 [or Form W-4] furnished by the payee. [Choose the paragraph that applies and delete the others.]

A. Confirmed as filed

The Form [1099-type] reporting $[amount] in box [number] to [payee name], SSN [as shown on the letter], for [year] is correct as filed. The amount is the total of [number] payments made between [date] and [date] by [check / ACH / card / wire] under [account / contract / invoice] [reference]. A schedule of the payments, with dates and amounts, is enclosed. The payee's name and SSN were taken from the Form W-9 dated [date], a copy of which is enclosed. [If federal income tax or backup withholding was withheld: $[amount] of federal income tax was withheld and is shown in box [4]; it was deposited and reported on our Form [945 / 941] for [year].] No correction will be filed.

B. Confirmed, but a different amount

The Form [1099-type] as originally filed reported $[amount]. On review, the correct amount is $[amount]. The difference arose because [a duplicate entry / a payment that was voided and reissued / a payment posted to this account that belonged to a different payee / a payment made in [year + 1] that was reported in [year]]. A corrected Form [1099-type] showing $[amount], filed under the same payer EIN, account number and income type as the original, was filed on [date] through [IRIS / FIRE / paper], and the corrected payee statement was sent to the payee on [date]. Copies are enclosed. The payments that make up the corrected amount are listed on the enclosed schedule.

The IRS matching program deletes an original return only when the correction carries the same payer name and/or EIN, the same account number if one was used, and the same income type if the amount changed; otherwise the manual says to "Pursue all IRs" (IRM 4.19.3.5.1(11), (13), Feb. 7, 2025). Keep the account number identical. A blank amount on a correction is read as zero (IRM 4.19.3.5.1(15)). When the payer gives a different amount, the manual says to "Issue a revised notice including the amount of income the payer provided" (IRM 4.19.3.23.9.6(6)).

C. Not paid to that SSN

[Payer] made no payments in [year] to the individual identified by the SSN shown on your letter. [Choose one:] (1) Our records show no account, vendor or employee under that SSN or under the name shown on the letter. / (2) The payments reported on the Form [1099-type] were made to [payee name as we have it], and the SSN we reported was taken from the Form W-9 dated [date] (enclosed); if that SSN does not belong to the person we paid, we have [solicited a new Form W-9 on [date] / begun backup withholding on [date]] and will file a corrected return when a valid TIN is received. / (3) The SSN on the original return was entered in error. The payments were made to [correct payee name], SSN [correct SSN], and a corrected return zeroing the original and a new return to the correct payee were filed on [date]; copies are enclosed.

When the payer states the income does not belong to the taxpayer, the manual's note says to use "normal no change PCs, not those designated for Stolen Identity" (IRM 4.19.3.23.9.6(6) Note). If the same situation applies to the following year, say so: the IRS associates the payer response with the subsequent year's return (IRM 4.19.3.23.9.7(2)).

D. Nominee or pass-through payment

The payments reported on the Form [1099-type] were made to [payee name] as [agent / nominee / escrow holder / account holder of record] for [beneficial owner(s), if known]. [Payer] correctly reported the payments to the party it paid, under the name and SSN that party certified on the Form W-9 dated [date] (enclosed). [Payer] [has / has no] record of the beneficial owner(s). [If known: The beneficial owner is [name], TIN [number].] The payee is responsible for reporting the amount to the beneficial owner(s) on its own information returns.

Subsequent year

[Choose one:] The same facts apply to tax year [year + 1], for which [Payer] filed a Form [1099-type] reporting $[amount] to the same name and SSN. / The facts above are limited to tax year [year].

Contact

Questions may be directed to [name, title], [phone], [email]. [Payer] has not discussed the taxpayer's return with the taxpayer beyond providing copies of the payee statement and has not been asked to disclose any further information.

[Signature]

[Name], [Title]

[Date]

Enclosures: copy of Letter 2625-C and Form 2624; payment schedule for [year]; Form W-9 dated [date]; [corrected Form [1099-type] and payee statement]; [Form 945 for [year], if withholding is confirmed]

Do not send original documents. Reply to the address on the letter within 60 days; no payer deadline is printed in the manual, but the payee was promised recontact within 60 days and a reconsideration case is suspended for 60 days (IRM 4.19.3.27.9). The manual names no penalty for a payer who does not answer; silence resolves the payee's case in the payee's favor and leaves your filed totals inconsistent with the IRS's picture of the payee. If four or more cases with the same EIN show the same problem, the campus Payer Agent coordinator begins research (IRM 4.19.3.6.2(1), Nov. 20, 2017). Once the income is confirmed, the manual tells the examiner the notice cannot change "without a corrected document from the payer" (IRM 4.19.3.23.9.6(8)), so a payer whose return was wrong should file the correction rather than only describe it.