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.
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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.
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