How to Process an IRS B-Notice

How to Process an IRS B-Notice

On Demand Webinar

Guest Speaker:   Steven Mercatante
Topic:   Taxation and Accounting
Credit:   ATATX 1.50, CPE 2.00, IRS 2.00
Average Rating: 5.0 / 5

Webinar Details $199

  • Webinar Length: 100 Minutes
  • Guest Speaker:   Steven Mercatante
  • Topic:   Taxation and Accounting
  • Credit:   ATATX 1.50, CPE 2.00, IRS 2.00
All Access Membership

IRS B-Notice processing rules are always tricky. Questions regarding where to start, who to contact, and when are among those that frequently cause confusion. Whether you are new or seeking an update this course will provide CPA’s, Accounts Payable, Payroll, and Tax professionals with plain English guidance to help you and your organization process IRS B-Notice’s with confidence.

The program will discuss the steps you need to take in response when you receive IRS B-notices, and what to do the first time you get a B-Notice for a particular vendor versus the second time. This program will also cover how the IRS name-TIN matching process works and how you can proactively create policies and procedures to lessen the number of B-Notices your organization receives each year. The bulk of the program will cover procedures your organization must follow in processing IRS B-Notices received because mistakes in your filing or because of the payor refusal to provide needed information as well as the establishment of procedures for the correct processing of B-Notices.

Agenda:

  • Reminders and what’s new in B-Notice processing
  • IRS B-Notice processing timelines
  • Reasons for receiving a B-Notice list and how to cut down on such notices
  • Step-by-step tips for performing your own due diligence prior to reaching out to vendors
  • B-Notice related TIN solicitation best practices in first B-Notice situations
  • Guidance on how to recognize when you are in a second B-Notice situation and what to do in response
  • B-Notice response do’s and don’ts
  • A discussion of how to recognize differences between B-Notice and penalty notice procedures 
  1. Introduction
  2. Overview 00:01:08
  3. The 1099-NEC Box 4 00:23:05
  4. The 1099-MISC/NEC Box 4 00:23:31
  5. The Current Form W-9 00:33:35
  6. TIN’S! 00:39:45
  7. TIN’S! Cont’d 00:43:19
  8. The W-9 - When to Get an Updated Form W-9 00:45:11
  9. The W-9 - Payee Refuses to Provide a TIN 00:49:43
  10. The W-9 - Identifying Your Payment: Exempt Payments 00:52:04
  11. The W-9 - Identifying Your Payee: How to Know Who’s Who 00:53:22
  12. The W-9 - Problem Payee’s 00:55:00
  13. The W-9 - The LLC 00:55:29
  14. The W-9 - The LLC as the Disregarded Entity 00:57:40
  15. The W-9 - Tax Exempt Organization Search Tool 00:58:27
  16. TIN Validation - IRS TIN Match Program 00:59:04
  17. TIN Validation - Vendors 01:02:18
  18. TIN Validation - Using The TIN Match Program 01:05:05
  19. Watch Out For The Middleman 01:06:08
  20. Backup Withholding Mechanics - Reportable Payments 01:07:54
  21. Backup Withholding Mechanics - Four Triggers 01:08:38
  22. Backup Withholding - Four Triggers 01:
  23. Backup Withholding & Corrections - Form 1099 Corrections 01:10:42
  24. Backup Withholding & Corrections - Payer Mistakes 01:11:47
  25. B-Notices & Backup Withholding - Reasons For B-Notices 01:12:11
  26. B-Notices & Backup Withholding -  B-Notices and IRS Matching 01:18:56
  27. B-Notice Response Best Practices - 2nd Notice 01:29:01
  28. B-Notice Response Best Practices - Tips 01:33:02
  29. Protect Yourself 01:36:21
  30. Attendee Questions 01:38:10
  31. Presentation Closing 01:41:08
  • Steven Mercatante

ATATX Credit

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CPE Credit

Continuing Professional Education

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For more information regarding administrative policies such as complaint and refund, and cancellation please contact our offices at 407-542-4317 or training@auroratrainingadvantage.com.

You must answer all questions during the webinar, view the recording completely and pass the test at the end with 70% correct answers to receive CPE credit.

IRS Credit

Preparer Tax Identification Number


  • 147C Letter 01:30:48
  • Audit 00:53:58, 01:11:47
  • Backup Withholding 00:14:39, 00:15:20, 00:23:09, 00:29:32, 01:08:46, 01:15:36, 01:23:55, 01:26:48, 01:32:46
  • B-Notice 00:01:04, 00:02:45, 00:04:47, 00:13:57, 00:26:40, 00:31:11, 00:41:46, 00:54:31, 01:02:17, 01:28:06, 01:33:15
  • C Corporation 00:34:46
  • CP-2100 00:01:46, 00:07:01, 01:14:21, 01:22:39, 01:30:18
  • CP2100-A 01:18:56
  • DBA -Doing Business As 00:37:33, 01:19:55
  • Disregarded Entity 00:34:30, 00:57:47
  • Due Diligence 00:35:16
  • Due Dilligence 00:06:50
  • EIN 00:39:59, 00:41:25, 01:30:34, 01:33:49
  • Exempt 00:52:06, 00:58:33
  • FATCA 00:35:10
  • Form 1042-S 00:35:10
  • Form 1099-B 00:59:04
  • Form 1099-DIV 00:59:04
  • Form 1099-INT 00:59:04
  • Form 1099-K 00:59:04
  • Form 1099 MISC 00:02:24, 00:18:14, 00:20:11, 00:23:05, 00:26:36
  • Form 1099-NEC 00:18:14, 00:20:11, 00:26:36
  • Form 1099-OID 00:59:04
  • Form 1099-PATR 00:59:04
  • Form 5498 00:02:39
  • Form 8832 00:55:42
  • Form 945 00:230:58, 01:08:35
  • Form W-8 00:35:23
  • Form W-9 00:14:17, 00:27:50, 00:33:36, 00:35:47, 00:39:00, 00:49:41, 01:14:42, 01:19:24, 01:26:05
  • Garnishment 01:07:18
  • Golden Parachute Payments 00:25:07
  • Independent Contractor 00:30:23, 00:41:57, 01:02:25, 01:06:30
  • Invoice 00:28:14
  • IRC 972-CG 00:00:46:43
  • IRC Section 3406(a) 00:14:38, 00:51:03
  • IRC Section 6041(a) 00:14:07
  • IRC Section 6109(a)(2) 00:17:10, 00:33:51
  • ITIN 01:30:58
  • Levy 01:07:09
  • Limited Liability Company (LLC) 00:34:25, 00:38:42, 00:49:10, 00:55:29, 01:19:39
  • Reasonable Cause 01:05:57
  • Resident Alien 01:31:01
  • S Corporation 00:34:46
  • Sole Proprietor 00:34:31, 00:37:32, 00:41:55, 00:49:06, 01:19:46
  • Substantial Presence Test (SPT) 1:31:10
  • Tax Exempt Organization Search Tool 00:58:38
  • TIN 00:01:49, 00:14:25, 00:14:45, 00:27:44, 00:31:27, 00:35:48, 00:37:10, 00:39:39, 00:45:56, 00:59:03, 01:14:28, 01:19:16, 01:30:29, 01:33:32
  • TIN Match Program 00:54:21, 00:59:12
  • Transaction 01:06:15
  • Vendor 00:19:24, 00:28:29, 00:53:38, 01:14:43, 01:21:56

147C Letter: The information on a 147C letter documents how an individual or business entity is filed with the Internal Revenue Service (IRS), and should match the information on business tax returns and 1099-K forms. The best way to request a 147C letter is to contact the IRS by phone

Audit: A formal examination of an organization's or individual's accounts or financial situation

Backup Withholding: Backup withholding is the tax that is levied on investment income, at an established tax rate, as the investor withdraws it. Backup withholding helps to ensure that government tax-collecting agencies (such as the IRS or Canada Revenue Agency) will be able to receive income taxes owed to them from investors' earnings. (www.investopedia.com)

C Corporation: A C corporation, under United States federal income tax law, refers to any corporation that is taxed separately from its owners. A C corporation is distinguished from an S corporation, which generally is not taxed separately. Most major companies are treated as C corporations for U.S. federal income tax purposes.

CP-2100: It is a notice that tells a payer that he or she may be responsible for backup withholding. It is accompanied by a listing of missing, incorrect, and/or not currently issued payee TINs. Largevolume filers will receive a CD or DVD data file CP2100, mid-size filers receive a paper CP2100, andsmall filers receive a paper CP2100A.

CP2100-A: It is a notice that tells a payer that he or she may be responsible for backup withholding. It isaccompanied by a listing of missing, incorrect, and/or not currently issued payee TINs. Largevolume filers will receive a CD or DVD data file CP2100, mid-size filers receive a paper CP2100, andsmall filers receive a paper CP2100A.

DBA -Doing Business As: Sometimes it makes sense for a company to do business under a different name. To do this, the company has to file what's known as a DBA, meaning "doing business as." A DBA is also known as a "fictitious business name," "trade name," or "assumed name."

Disregarded Entity: A disregarded entity refers to a business entity with one owner that is not recognized for tax purposes as an entity separate from its owner. A single-member LLC ( “SMLLC”), for example, is considered to be a disregarded entity. (www.pntax.com)

Due Diligence: Due diligence is a process or effort to collect and analyze information before making a decision or conducting a transaction so a party is not held legally liable for any loss or damage. The term applies to many situations but most notably to business transactions.

EIN: The Employer Identification Number, also known as the Federal Employer Identification Number or the Federal Tax Identification Number, is a unique nine-digit number assigned by the Internal Revenue Service to business entities operating in the United States for the purposes of identification.

Exempt : Exempt employee is a term that refers to a category of employees set out in the Fair Labor Standards Act. They do not receive overtime pay, nor do they qualify for the minimum wage

FATCA: FATCA was enacted in 2010 by Congress to target non-compliance by U.S. taxpayers using foreign accounts. FATCA requires foreign financial institutions (FFIs) to report to the IRS information about financial accounts held by U.S. taxpayers, or by foreign entities in which U.S. taxpayers hold a substantial ownership interest. (www.treasury.gov). FACTA (Fair and Accurate Credit Transactions Act) is an amendment to FCRA (Fair Credit Reporting Act ) that was added, primarily, to protect consumers from identity theft. The Act stipulates requirements for information privacy, accuracy and disposal and limits the ways consumer information can be shared.

Form 1042: Form 1042, also "Annual Withholding Tax Return for U.S. Source Income of Foreign Persons", is used to report tax withheld on certain income of foreign persons.

Form 1099-DIV : Form 1099-DIV: Dividends and Distributions is an Internal Revenue Service (IRS) form sent to investors who receive distributions from any type of investment during a calendar year. Investors can receive multiple 1099-DIVs. Each Form 1099-DIV should be reported on an investor's tax filing.

Form 1099-INT: Form 1099-INT is the IRS tax form used to report interest income. The form is issued by all payers of interest income to investors at year end and includes a breakdown of all types of interest income and related expenses. Payers must issue Form 1099-INTs for any party to whom they paid at least $10 of interest during the year.

Form 1099-K: A payment settlement entity (PSE) must file Form 1099-K for payments made in settlement of reportable payment transactions for each calendar year. A PSE makes a payment in settlement of a reportable payment transaction, that is, any payment card or third party network transaction, if the PSE submits the instruction to transfer funds to the account of the participating payee to settle the reportable payment transaction.

Form 1099-MISC: The Form 1099-MISC is an Internal Revenue Service (IRS) tax return document used to report miscellaneous payments made to nonemployee individuals, such as independent contractors, during the calendar year. (www.shrm.org)

Form 1099-NEC: In the context of 1099 tax filing, NEC stands for “Nonemployee Compensation” (the first letters of the three words None, Employee and Compensation). Most tax payers recognize NEC as box 7 on Form 1099-MISC. NEC is used to report income paid to independent-contractors / the-self-employed (referred to as 1099 employees for simplification purposes). So, while employers report income that gets paid to employees on Box 1 (Wages, tips, other compensation) of the W2 form, payers report income that gets paid to none-employees on Box 7 (NEC) of the 1099-MISC form. As an individual, if you received form 1099-MISC instead of Form W-2 then the payer did not consider you an employee and did not withhold income tax or social security and Medicare tax.

Form 1099-OID: Form 1099-OID is a tax form intended to be submitted to the Internal Revenue Service by the holder of debt instruments which were discounted at purchase to report the taxable difference between the instruments' actual value and the discounted purchase price.

Form 1099-PATR: File Form 1099-PATR, Taxable Distributions Received From Cooperatives, for each person to whom the cooperative has paid at least $10 in patronage dividends and other distributions described in section 6044(b), or from whom you withheld any federal income tax under the backup withholding rules regardless of the amount of the payment.

Form 5498: Tax Form 5498 is used to report contributions on IRAs, which include traditional and Roth, as well as Savings Incentive Match Plan for Employees (SIMPLE) and Simplified Employee Pension (SEP). Many people are under the impression that they need Tax Form 5498 in order to file their final return. (www.irs.gov)

Form 8832: Form 8832 is the Entity Classification Election form from the IRS. It is filed to elect a tax status other than the default status for your entity. For example, an LLC can elect to be taxed as a C Corporation.

Form 945: IRS Form 945 is titled Annual Return of Withheld Federal Income Tax. Form 945 is used to report withheld federal income tax from nonpayroll payments, including distributions from qualified retirement plans.

Form W-8: Form W-8 is filled out by foreign entities (citizens and corporations) in order to claim exempt status from certain tax withholdings. The form is used to declare an entity's status as non-resident alien or foreign national who works outside of the United States.

Form W-9: Form W-9 (officially, the "Request for Taxpayer Identification Number and Certification") is used in the United States income tax system by a third party who must file an information return with the Internal Revenue Service (IRS). It requests the name, address, and taxpayer identification information of a taxpayer (in the form of a Social Security Number or Employer Identification Number). - Wikipedia (https://en.m.wikipedia.org/)

Garnishment: A legal summons or warning concerning the attachment of property to satisfy a debt

Golden Parachute Payments: Golden parachute payments are payments of compensation made to individuals whose companies experience a change in control

IRC Section 3406(a): Requires that, under certain circumstances, including the payee's failure to provide a TIN, the payer must perform backup withholding.

IRC Section 6041(a): Provides that persons engaged in trade or business must report certain payments on an information return.

IRC Section 6109(a)(2): Requires that a payee provide a TIN to the payer when the payment will be reportable on an information return.

IRS Notice 972CG: The IRS started mailing 972CG penalty notices in July 2013 regarding 1099's with missing or incorrect TIN/Name Combinations. A 972CG is a NOTICE OF PROPOSED CIVIL PENALTY. A simple way to prevent this costly penalty is to verify that your information is correct prior to filing.

ITIN : An Individual Taxpayer Identification Number is a United States tax processing number issued by the Internal Revenue Service. It is a nine-digit number that begins with the number 9, and the 4th and 5th digits, also known as second section, range from 70 to 88, 90 to 92 and 94 to 99.

Independent Contractor: An independent contractor is a person or entity contracted to perform work or provide services to another entity as a non-employee. As a result, independent contractors must pay their own Social Security and Medicare taxes. - Investopedia (https://www.investopedia.com/)

Invoice: An invoice, bill or tab is a commercial document issued by a seller to a buyer, relating to a sale transaction and indicating the products, quantities, and agreed prices for products or services the seller had provided the buyer. Payment terms are usually stated on the invoice.

Levy: A tax levy, under United States Federal law, is an administrative action by the Internal Revenue Service under statutory authority, generally without going to court, to seize property to satisfy a tax liability. The levy "includes the power of distraint and seizure by any means".

Limited Liability Company (LLC): An LLC is a corporate structure where members cannot be held accountable for the company’s debts or liabilities. This can shield business owners from losing their entire life savings if, for example, someone were to sue the company. Can be a single member (much like a sole proprietor) or a multi-member. It shares certain traits of both corporations as well as partnerships or sole proprietorships. It is not a corporation.

Reasonable Cause : Reasonable cause is based on all the facts and circumstances in your situation. The IRS will consider any reason which establishes that you used all ordinary business care and prudence to meet your federal tax obligations but were nevertheless unable to do so.

Resident Alien : A resident alien is a foreign person who is a permanent resident of the country in which he or she resides but does not have citizenship. To fall under this classification in the United States, a person needs to either have a current green card or have had one in the previous calendar year.

S Corporation: An S corporation, for United States federal income tax, is a closely held corporation that makes a valid election to be taxed under Subchapter S of Chapter 1 of the Internal Revenue Code. In general, S corporations do not pay any income taxes.

Sole Proprietor: A business that legally has no separate existence from its owner. The sole proprietorship is the simplest business form under which one can operate a business. The sole proprietorship is not a legal entity. It simply refers to a person who owns the business and is personally responsible for its debts.

Substantial Presence Test (SPT) : The Substantial Presence Test (SPT) is a criterion used by the Internal Revenue Service (IRS) in the United States to determine whether an individual who is not a citizen or lawful permanent resident in the recent past qualifies as a "resident for tax purposes" or a "nonresident for tax purposes"; it is a form of physical presence test. The SPT should be used in conjunction with the Green Card Test (the criterion that the individual possessed a valid Green Card at any time of the year). An individual who satisfies either one or both of these tests is treated as a resident for tax purposes.

TIN: A Taxpayer Identification Number is an identifying number used for tax purposes in the United States and in other countries under the Common Reporting Standard. In the United States, it is also known as a Tax Identification Number or Federal Taxpayer Identification Number.

TIN Match Program: TIN Matching is part of a suite of Internet-based pre-filing e-services that allows “authorized payers” the opportunity to match 1099 payee information against IRS records prior to filing information returns.

Tax Exempt Organization Search Tool: Tax Exempt Organization Search helps users find information about a tax-exempt organization’s federal tax status and filings.

Transaction: In QuickBooks, a transaction type identifies what kind of transaction occurred, such as a customer transaction, bill payment or a bank transfer. When you submit a transaction, you type in a transaction code to represent it.

Vendor: A vendor is a person or business that supplies goods or services to a company. Another term for the vendor is the supplier. In many situations, a company presents the vendor with a purchase order stating the goods or services needed, the price, delivery date, and other terms.


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