IRS updates backup withholding CP2100 and CP2100A notices
On November 14, 2019, the IRS issued a statement that they had redesigned the CP2100 and CP2100 notices and given them a new look. The new notices were updated to provide additional information to companies that file information returns like From 1099-MISC. The additional information added includes:
- the types of taxpayer identification numbers issued
- guidance on which “B” notice to use
- instructions on how and when to send “B” notices
- direction on how to validate TINs
- information on when to stop backup withholding
- next steps after receiving a notice
The IRS typically sends out these notices (CP2100 is sent to large and midsize filers. CP2100A is sent to small filers) to companies in October and again in the following April. The notices inform companies that they might be responsible for 24% backup withholding on all 1099s filed with the IRS that had TINs not found in the IRS database or with an incorrect name/TIN combination. The CP2100 or CP2100A notice will list the payees from the 1099s submitted that had one of these issues. The company should follow the “B” notice requirements in IRS Publication 1281.
For additional information see Publication 1281.
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Disclaimer – Any accounting, business or tax advice contained in this communication, including attachments and enclosures, is not intended as a thorough, in-depth analysis of specific issues. This article is also not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties.