New Backup Withholding Rules For TIN-Name Mismatch

When you are noti­fied by the IRS that a payee pro­vided an incor­rect name and tax­payer iden­ti­fi­ca­tion num­ber (TIN) com­bi­na­tion, you are to start backup with­hold­ing (28%) and pass along any “B Notices” you receive.  

 The inter­rim pro­ce­dures require the payee to val­i­date a Social Secu­rity num­ber (SSN) by con­tact­ing the local Social Secu­rity Admin­is­tra­tion (SSA) office request­ing an SSN print­out, which they must give you a copy of.  Once you receive the print­out you can stop backup withholding. 

There are 2 “B Notices”. These are notices you receive with your mis­match noti­fi­ca­tion that you are to for­ward to the payee with the TIN-Name mis­match.   The first B-Notice you receive should be given to the payee with a Form W9, Request for Tax­payer Iden­ti­fi­ca­tion Num­ber and Cer­tifi­cate

NOTE: Fol­low­ing this link takes you do a pdf doc­u­ment at the IRS.gov web­site.  Pdfs can be viewed and printed using Adobe Acro­bat Reader, which can be down­loaded for free from Adobe.comArt and Busi­ness Con­sult­ing LLC (ABC LLC) and its own­ers, employ­ees and affli­ates are NOT affil­i­ated with IRS.gov or Adobe.com.  When you visit their sites you will be sub­ject to their poli­cies and ABC LLC does not know what thier poli­cies are. 

To con­tinue.  When you receive the first Notice of a TIN/Name mis­match from the IRS you should deliver the B Notice to the payee with a blank Form W-9 and begin backup with­hold­ing of 28%.  Pre­sum­ably if they return the W-9 with dif­fer­ent TIN/Name infor­ma­tion you would make the change and stop backup with­hold­ing.  If they don’t then even­tu­ally you will get the sec­ond B notice, but while you are wait­ing for it you would con­tinue backup with­hold­ing in the absence of any action by the payee. 

When you receive a sec­ond notice of TIN/Name mis­match you should deliver the sec­ond B notice to the payee (do NOT give them a w-9); the sec­ond notice tells the payee they must go to the IRS or SSA to get the proper Name-TIN com­bi­na­tion.  The payee must now cer­tify the TIN-Name Com­bi­na­tion with the SSN print­out.  In the past the SSA would send a form SSA-7028, but the Form is now obso­lete hence the inter­rim pro­ce­dure noted above. 

In gen­eral you should only receive 2 of these notices in a 3 year period per payee. 

As always, small busi­ness ser­vices and tax­a­tion are our busi­ness.  If you need help Please give Art & Busi­ness Con­sult­ing a call.  We would love to engage you as a client.

The usual dis­claimers: Although ABC has made every effort to insure the accu­racy of Taxes, Tips and Tools, mis­in­for­ma­tion, dis­in­for­ma­tion, changes, mis­takes, typos and hack­ers hap­pen, there­fore Art & Busi­ness Con­sult­ing LLC takes no respon­si­bil­ity for any action taken or results based on the infor­ma­tion sup­plied here in. The con­tent of this blog gen­er­ally applies to busi­ness and indi­vid­ual tax­a­tion in the United States of Amer­ica.  Inter­nal Rev­enue Ser­vice Cir­cu­lar 230 Dis­clo­sure:  As pro­vided for in Trea­sury reg­u­la­tions, advice (if any) relat­ing to fed­eral taxes that is con­tained in this com­mu­ni­ca­tion (includ­ing attach­ments) is not intended or writ­ten to be used, and can­not be used for the pur­pose of (1) avoid­ing penal­ties under the Inter­nal Rev­enue Code or (2) pro­mot­ing, mar­ket­ing or rec­om­mend­ing to another party any plan or arrange­ment address herein.  Art & Busi­ness Con­sult­ing LLC cur­rently does not have a cer­ti­fied pub­lic accoun­tant, human resource spe­cial­ist, finan­cial plan advi­sor or an attor­ney on staff; this infor­ma­tion is purely for edu­ca­tional pur­poses and not to be con­strued as legal or finan­cial advice. Art & Busi­ness Con­sult­ing LLC and its employ­ees, mem­bers and asso­ciates are not engage to prac­tice law; you always should dis­cuss legal mat­ters with your attor­ney before talk­ing to any­one else.

One Response to “New Backup Withholding Rules For TIN-Name Mismatch”

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  1. I have always won­dered about this — thanks for mak­ing it clear for me.