An IRS B Notice is a letter from a company that pays you — your bank, brokerage, or a client who issues you a 1099 — telling you that the name and Taxpayer Identification Number on your account don’t match what the IRS has on file. You respond by sending the payer a corrected Form W-9 for a first notice, or federal verification of your TIN from the Social Security Administration or IRS for a second notice. Do it before the payer’s deadline or 24% of every future payment gets held back as backup withholding.
Why the Letter Came From Your Bank, Not the IRS
The B Notice arrives on your bank or client’s letterhead, but the IRS started the chain. When a payer files 1099s and the name-TIN combinations don’t match IRS records, the IRS sends the payer a CP2100 or CP2100A notice listing every account with a problem.1Internal Revenue Service. Understanding Your CP2100 or CP2100A Notice The payer is then required to pass the problem down to you as a B Notice.2Internal Revenue Service. Backup Withholding “B” Program
So calling the IRS won’t get the notice cleared. The only party that can stop the process is the payer that sent you the letter, and only after you give them what they need.
Common Reasons You Got One
The most frequent trigger is a name change that hasn’t been updated everywhere. If you got married, divorced, or legally changed your name and told your bank but not the Social Security Administration, the two records diverge and the IRS flags the mismatch. It can also run the other way: you updated the SSA but never told the payer.
Data-entry errors cause plenty of notices too. A transposed digit in a Social Security Number, a misspelled name, or an employee at the payer who typed a preferred name instead of the full legal one all produce the same result. Sometimes the mistake is entirely on the payer’s end, meaning you did nothing wrong and still got the letter.
Responding to a First B Notice
For a first notice, the fix is straightforward. Fill out a new Form W-9, make sure the name matches exactly what the SSA has on file, sign it, and send it back to the payer. Not to the IRS, not to the SSA — to the payer that sent you the notice.2Internal Revenue Service. Backup Withholding “B” Program The payer then uses your corrected W-9 to update the TIN on future returns filed with the IRS.
The name on the W-9 has to be your legal name as it appears in SSA records. Middle initials, suffixes, and hyphenation matter. If your legal name is Margaret but everyone calls you Peggy, put Margaret. Not sure what the SSA has? Log into your my Social Security account at ssa.gov to check.
Responding to a Second B Notice
A second B Notice is a different animal. If the same name-TIN combination gets flagged again within a three-year window, the payer is required to send you a second notice, and this time a fresh W-9 will not be accepted.2Internal Revenue Service. Backup Withholding “B” Program You have to send independent verification from a federal agency.
For individuals with a Social Security Number, the accepted proof is a Social Security Number Printout from the SSA. The older Form SSA-7028 was discontinued in 2010, so the printout is now the standard.3Internal Revenue Service. New Backup Withholding Procedures: Social Security Number Validation Following Receipt of Second B Notice You request one at your local SSA office. If you’re a business with an Employer Identification Number, the equivalent is IRS Letter 147C, which you can request by calling the Business and Specialty Tax Line at 1-800-829-4933.
Once you have the printout or letter, send a copy to the payer along with a copy of the B Notice you received. Only after the payer holds that federal verification can they update your account and stop backup withholding.
What Happens If You Ignore It
If you don’t respond, the payer must begin backup withholding at 24% on all reportable payments to you.4Internal Revenue Service. Publication 15 (2026), (Circular E), Employer’s Tax Guide The payer’s deadline to start withholding is 30 business days after they received the CP2100 or CP2100A from the IRS.1Internal Revenue Service. Understanding Your CP2100 or CP2100A Notice That clock runs whether or not you’ve opened your mail.
Payments subject to backup withholding include interest, dividends, independent-contractor payments, broker proceeds, royalties, and payment card settlement transactions.5Office of the Law Revision Counsel. 26 U.S. Code 3406 – Backup Withholding The cash-flow hit is significant. A freelancer earning $5,000 a month from a single client loses $1,200 of every payment to the IRS before it hits the bank account.
Withholding continues until the payer receives what the notice requires — a corrected W-9 for a first notice, federal verification for a second. There’s no shortcut through the IRS.
Payments That Are Exempt
Some payment types are not subject to backup withholding even with an unresolved B Notice:6Internal Revenue Service. Backup Withholding
- Retirement distributions from IRAs, 401(k)s, pensions, and employee stock ownership plans
- Real estate transactions
- Cancelled debts
- Unemployment compensation
- State or local income tax refunds
- Qualified tuition program earnings
These are excluded because they carry their own withholding and reporting rules.
Getting Withheld Money Back
Money taken through backup withholding isn’t gone. It’s credited toward your federal tax liability for the year. The 1099 you receive from the payer will show the amount withheld, and you report it as federal income tax withheld on your annual return.7Internal Revenue Service. Topic No. 307, Backup Withholding If more was withheld than you owe, the excess comes back as a refund. You just have to wait until you file, which can mean many months without that cash.
Fixing the Underlying Problem at the SSA
If the mismatch traces back to a name change, sending a W-9 solves the immediate notice but doesn’t stop the same flag from firing again. Update the record at the source. You can start a name-change application online at ssa.gov, though you may need to visit a local office to finish it.8Social Security Administration. U.S. Citizen – Adult Name Change on Social Security Card
You’ll need original documents proving the legal name change: a marriage certificate, divorce decree, court order, or certificate of naturalization showing the new name. The SSA also requires a photo ID such as a driver’s license or U.S. passport, plus proof of U.S. citizenship. Photocopies and notarized copies aren’t accepted.8Social Security Administration. U.S. Citizen – Adult Name Change on Social Security Card Once the SSA has updated your record, check that every payer who issues you a 1099 has the same legal name on file, character for character.