IRS “B” (CP2100) and “P” (972CG) Notice Season is Right Around the Corner

July 20, 2020

Note: This post was updated on May 22, 2023.

Though the U.S. workplace model has shifted quite a bit in the past few years, one of the few items that has stayed consistent is IRS compliance requirements associated with “B”(CP2100) and “P”(972CG) notices. As companies start implementing permanent workplace decisions whether that be in-office, hybrid or remote, it is important to proactively avoid these notices and ensure they are not overlooked. Each of these notices require your organization to take a series of actions within specific timelines to avoid being assessed penalties under Internal Revenue Code (IRC) sections §6721 and  §6722.

What is a “B” notice?

A “B” notice, backup withholding notice or CP2100 is when the IRS takes the 1099s that were filed and matches those against their own database of name and taxpayer identification number (TIN) records. The IRS prepares notices to payors that have filed 1099 forms with either missing or invalid TINs annually by means of the “B” notice or CP2100. The notice states that the payor may be responsible for backup withholding and is accompanied by a listing of missing, incorrect or not currently issued payee TINs.

What is a “P” notice?

A “P” notice, penalties and abatement or 972CG is when the IRS proposes penalties to filers annually for:

  1. Missing or invalid name/TIN combinations filed on returns
  2. Returns filed or furnished to the recipient late
  3. Returns filed or furnished to the recipient in incorrect formats

The notice requires the filer to demonstrate “reasonable cause” to qualify for penalty abatement and to solicit recipients for upcated name/TIN information.

Five things to ask yourself about your organizational processes in advance of the upcoming season:

  1. With many companies offering permanent hybrid or remote work options, do you or your team still have access to receive the incoming IRS Notices via mail? What about the returned Forms W-9 from recipients you solicited?
  2. Is there a secure process in place to transport the sensitive personal information to the employees’ residence for researching the details and responding to notices?
  3. Do you or your team have scanning capabilities to return legal responses that require wet signatures or other printed correspondence?
  4. Do you or your team have remote mass printing and mailing capabilities so that solicitations can be generated by the due dates?
  5. Is there technology in place for you or your team to coordinate the details of each notice and track each step of the compliance process?

Best practices to minimize “B” and “P” notices

Taking a proactive approach to tax identity management is strongly preferred when attempting to minimize “B” and “P” notices. For information returns that are subject to backup withholding, there are automated proactive processes that can alert you when you have incorrect name/TIN information so that you can proactively work to prevent “B” notices down the line. These proactive processes ensure information collected is as accurate as possible before filing information with the IRS.

  1. Interactive TIN Matching, also known as “Real Time TIN Matching,” provides an opportunity to quickly check small amounts of data against the IRS database. This will provide you a live TIN status return message within five seconds of submitting. Payers can submit up to 25 name and TIN combinations at a time when using the Interactive TIN Matching service through the IRS.
  2. Bulk TIN Matching companies are able to submit up to 100,000 name and TIN combinations for the IRS to review and verify. You will need to submit your information in a specific format for the IRS to process it correctly to do a Bulk Tin Match. It can take up to 24 hours for the IRS to respond.

Take Action

Still have questions about IRS requirements and what your business needs to stay compliant? Reach out to our team and see how we can help. 

Sign up for Email Updates

Stay up to date with the latest tax and compliance updates that may impact your business.



Sovos was built to solve the complexities of the digital transformation of tax, with complete, connected offerings for tax determination, continuous transaction controls, tax reporting and more. Sovos customers include half the Fortune 500, as well as businesses of every size operating in more than 70 countries. The company’s SaaS products and proprietary Sovos S1 Platform integrate with a wide variety of business applications and government compliance processes. Sovos has employees throughout the Americas and Europe, and is owned by Hg and TA Associates.
Share This Post

North America Sales & Use Tax
June 5, 2023
Sovos Onboarding: 6 Departments Dedicated to Customer Success

If you are evaluating Sovos, we want you to understand expectations for the customer experience and what teams are there to support you. At Sovos, we have a range of teams ready to support you from the day you sign a contract. Whether it be a customer success representative to review the value you are […]

North America Sales & Use Tax
June 1, 2023
3 Things to Remember if You Get a Sales Tax Notice

Have you ever received a sales tax notice from a state department of revenue? Whether you answered yes or no, there are important things to keep top of mind to help keep your business prepared. Finding out that you have failed to comply with one or more of your sales tax obligations can be startling. […]

EMEA VAT & Fiscal Reporting
May 31, 2023
Bizkaia: What is Batuz LROE?

The Ledger of Economic Operations (Libro Registro de Operaciones Económicas), also known as LROE, is a main compliance element of the Batuz tax control system. This system is under implementation in the province of Bizkaia, located in the autonomous Basque community in Spain. Taxpayers under the Batuz mandate must comply with both TicketBAI and LROE […]

North America Unclaimed Property
May 30, 2023
How to Set Up a Successful Unclaimed Property Program

Unclaimed property compliance can be difficult and overwhelming. Clients often ask what they should be doing to ensure they are compliant with the various laws and regulations. It isn’t easy, especially if you have multiple property types such as checks, credits or customer accounts that have the potential to become unclaimed property in multiple states. […]

North America ShipCompliant
May 30, 2023
How Hold At Locations Improve Your Customers’ Wine Delivery Experience

Direct-to-consumer shipping wine lovers enjoy the convenience of having their favorite vinos shipped to their front door. But what happens when, for whatever reason, they aren’t available to accept their wine deliveries? Whether they aren’t available during the day or they don’t have someone 21 or older available to sign for their package, these challenges […]