1099 Corrections, B-Notice Processing, and Backup Withholding Tips for 2025

Author: Steven D. Mercatante

Per the IRS Education Provider Standards this course must be COMPLETED by 12/31/2027 to receive credits. NOTE: Go to My Professional Profile in your CCH CPELink account settings to ensure your name, and PTIN number; matches your PTIN card

Issuers of 1099 Forms can adopt best practices and procedures that streamline the year end process and provide assurance that 1099s are correct, at least so far as vendor names and TINs are concerned. While certain errors in reporting dollar amounts are considered “inconsequential” under new de minimis error rules, errors in the payee name or TIN are never considered inconsequential and can result in penalties.

Best practices to avoid errors and penalties include TIN solicitation, TIN verification, timely and appropriate response to IRS notices including issuing and follow up on B-Notices to payees, and procedures to implement and discontinue backup withholding as required.

The course will discuss the solicitation process including solicitation using and analyzing Form W-9, annual solicitations, B-notices and solicitations in response to IRS notices, and what to do when the vendor does not provide a TIN or provides an incorrect TIN.

It will cover how to register to use the IRS TIN verification service, how the system matches names and numbers and how this can help in preparing submissions to prevent false positive or negative responses from the system. It will cover how to submit TINs for verification and what to do when the system indicates a mismatch between the name and number of the vendor.

Procedures related to IRS notification of a name number mismatch or propose penalties for incorrect information returns are also covered including procedures the payer must follow in issuing B-Notices to payees.

Publication Date: February 2025

Topics Covered

• Best practices
• What's new
• IRS matching process
• Penalties
• Establishing reasonable cause
• Solicitations
• TIN verification
• Notices
• Backup withholding

Learning Objectives

• Identify best practices and procedures that smooth the year end process
• Identify how to process corrections
• Identify how to streamline filing to avoid negative interactions with the IRS
• Identify how to leverage the W-9 to cut down on TIN errors
• Identify how to process a B-Notice effectively
• Identify backup withholding strategies for 2024

Level
Basic

Instructional Method
Self-Study

NASBA Field of Study
Taxes (2 hours)

Program Prerequisites
None

Advance Preparation
None