IRS B-Notice Deadlines and Requirements
Stay compliant with B-Notice deadlines by responding quickly and correcting vendor TIN mismatches before penalties apply.
IRS B-Notice Deadlines and Requirements (First and Second B-Notice Explained)
An IRS B-Notice (also called a Backup Withholding Notice) is a required notice that businesses must send to vendors, contractors, or payees when the IRS reports that a name and TIN combination does not match IRS records.
B-Notices are typically triggered after the IRS issues a CP2100 or CP2100A notice, which lists vendors whose taxpayer information was reported incorrectly on one or more 1099 forms.
If your company receives a CP2100 notice, you may be legally required to send B-Notices within specific deadlines.
What is a B-Notice?
A B-Notice is a formal letter sent by the payer (your company) to the payee (vendor/contractor) stating that:
- the IRS reported a mismatch
- the vendor’s name and TIN combination does not match IRS records
- the vendor must provide corrected taxpayer information
B-Notices are designed to help businesses correct vendor data and reduce IRS reporting errors.
The purpose of a B-Notice is to obtain corrected information and prevent future mismatches.
Why B-Notices Matter
Failing to follow IRS B-Notice rules can result in:
IRS penalties
backup withholding liability
increased audit exposure
repeated CP2100 notices year after year
A strong B-Notice process helps protect your business from ongoing compliance issues.
What Triggers a B-Notice?
B-Notices are most commonly triggered when the IRS sends your business:
CP2100 Notice
CP2100A Notice
These notices include a list of payees whose:
- name and TIN combination does not match IRS records
- TIN is missing or invalid
- taxpayer information is incorrect
Once you receive the notice, you must determine whether each payee should receive:
- a First B-Notice
- a Second B-Notice
The correct B-Notice type depends on whether the payee has been flagged before.
First vs Second B-Notice (What’s the Difference?)
The IRS has two categories of B-Notices:
- First B-Notice
- Second B-Notice
These have different documentation requirements and different vendor response expectations.
First B-Notice (Initial Mismatch)
A First B-Notice is sent when the vendor has not been flagged as mismatched within the IRS lookback period.
A First B-Notice typically requests:
a new signed Form W-9
This allows the vendor to certify their correct name and TIN.
Second B-Notice (Repeat Mismatch)
A Second B-Notice is sent when the same vendor has been flagged again within the IRS lookback period.
Second B-Notices are more serious and typically require:
verification from the Social Security Administration (SSA) or IRS documentation (depending on payee type)
In many cases, a second W-9 alone may not be sufficient.
A Second B-Notice is a repeat mismatch and may require stronger proof of taxpayer identification.
IRS B-Notice Deadlines (Critical Timing Requirements)
B-Notice deadlines are extremely important because they determine whether your business is compliant with IRS outreach requirements.
When Do You Have to Send a B-Notice?
In general, you must send the B-Notice:
within 15 business days of receiving the CP2100/CP2100A notice
OR
by the date specified in the IRS notice, whichever is later
This is a commonly cited IRS requirement for timely B-Notice outreach.
Many businesses miss deadlines because CP2100 notices are opened late or routed incorrectly internally.
How Long Does the Vendor Have to Respond?
After the vendor receives a B-Notice, they generally have:
30 days to provide corrected taxpayer information (such as a W-9)
If the vendor does not respond, backup withholding may apply.
If a vendor fails to respond within the required timeframe, backup withholding may be required on future payments.
Backup Withholding Requirements After a B-Notice
If the vendor does not provide corrected taxpayer information, your company may need to begin backup withholding.
The IRS backup withholding rate is currently:
24%
Backup withholding may apply when:
- vendor does not respond to First B-Notice
- vendor provides incorrect documentation
- vendor refuses to provide valid taxpayer information
Backup withholding disputes are one of the biggest operational issues caused by poor B-Notice workflows.
What Must Be Included in a B-Notice?
A compliant B-Notice package typically includes:
- a copy of the IRS-provided B-Notice template (First or Second)
- a request for corrected taxpayer information
- instructions for completing and returning Form W-9 (First B-Notice)
- explanation of backup withholding requirements
- a deadline for response
Most organizations send B-Notices by mail, but they may also coordinate email outreach depending on internal policy.
How to Track B-Notice Compliance (Best Practice)
To stay compliant, organizations should track:
CP2100 notice receipt date
vendor name and TIN in the notice
First vs Second B-Notice determination
date B-Notice was sent
vendor response status
corrected W-9 received
validation results after correction
backup withholding start date (if required)
B-Notice tracking is essential for audit readiness and penalty defense.
Common Mistakes Businesses Make With B-Notices
Avoid these common errors:
- missing the 15-business-day deadline
- sending the wrong B-Notice type (First vs Second)
- failing to document when notices were mailed
- accepting corrections without a signed W-9
- not revalidating corrected name/TIN combinations
- not implementing backup withholding when required
- failing to retain proof of compliance
Poor B-Notice management often leads to repeat mismatches and increased IRS penalties.
Best Practices to Reduce CP2100 Notices and B-Notice Workload
The best way to reduce B-Notices is to prevent mismatches before filing.
Recommended best practices include:
validate vendor name/TIN combinations at onboarding
run bulk IRS TIN matching in Q4
collect W-9 forms before payment
maintain clean vendor master data
revalidate corrected records before filing
automate W-9 outreach and reminders
Proactive vendor validation dramatically reduces CP2100 notices and B-Notice compliance workload.
B-Notice Timeline Example
Here’s a simplified example timeline:
Day 0: IRS CP2100 notice received
Day 1–15: B-Notices sent to vendors
Day 16–45: vendor response window (W-9 correction submitted)
Day 46+: backup withholding may apply if vendor does not respond
This timeline shows why early vendor outreach is critical.
Frequently Asked Questions (FAQ)
What IRS notice triggers a B-Notice requirement?
B-Notices are typically triggered by IRS CP2100 or CP2100A mismatch notices.
How soon do I have to send a B-Notice?
In most cases, you must send B-Notices within 15 business days of receiving the CP2100 notice or by the date specified in the notice.
What is the difference between a First and Second B-Notice?
A First B-Notice requests a new signed W-9. A Second B-Notice is a repeat mismatch and may require additional taxpayer verification documentation.
What happens if the vendor does not respond?
If the vendor does not respond with corrected taxpayer information, backup withholding may be required on future payments.
What is the backup withholding rate?
The current IRS backup withholding rate is 24%.
Conclusion
IRS B-Notice requirements apply when the IRS issues CP2100 or CP2100A mismatch notices for incorrect vendor name and TIN combinations. Businesses must send B-Notices within strict deadlines, typically within 15 business days of receiving the IRS notice, and track whether the notice is a First or Second B-Notice. Vendors generally have a limited timeframe to respond with corrected information, and failure to respond may trigger backup withholding requirements at a 24% rate. The best way to reduce B-Notice workload is to validate vendor data early using IRS TIN matching and maintain clean vendor master data before filing season.
Reduce B-Notice Compliance Workload with TIN Comply
TIN Comply helps businesses reduce CP2100 notices and B-Notice workload by validating vendor name and TIN combinations before filing. With real-time IRS TIN matching, bulk vendor list validation, automated W-9 workflows, and audit-ready reporting, TIN Comply helps organizations prevent mismatches early and stay compliant year-round.