Sending out second B-Notices

December 2, 2013

The purpose of sending out B-notices is to collect or verify missing Taxpayer Identification Numbers. The penalty for not sending out B-notices could result in 100 USD fine that accompanies a 972CG Notice so as an organization it is important to stay dated with reporting requirements. Organizations sending their payees a second "B" Notice must include language informing the recipient of new procedures for certifying their Taxpayer Identification Numbers. The second "B" Notice requires the recipient to certify their TIN with the Social Security Administration if he or she is an individual. Recipients that have an Employer ID Number must certify their TINs with the Internal Revenue Service. In the past if a payee received a second "B" Notice, they had to obtain form SSA-7028, "Notice to Third Party of Social Security Number Assignment," and provide a copy to the payor in order to stop performing backup withholding. Beginning in 2010, however, the SSA no longer provides form SSA-7028. Instead, the recipient must visit an SSA office and receive an official Social Security Number Printout. IRS Publication 1281 states that your organization must clearly indicate the change in your "B" Notice letter. Announcement 2010-41 includes the following sample language that satisfies this requirement: Note that the Instructions for Incorrect Social Security Numbers have changed and the SSA no longer uses Form SSA-7028. You must request a Social Security Number Printout from SSA rather than Form SSA-7028. You must send a copy of the Social Security Number Printout directly to us, along with a copy of this notice. Despite the changes to verifying social security numbers with the SSA, the IRS has not changed the requirements for non-individuals and sole proprietors. These entities must still certify their EINs with the IRS by obtaining form 147C. Source: The Account Payable Network