Notice of possible Payee/TIN Discrepancy

[DixieEA]

A client received a CP-2100A notice for possible 1099 error for the TIN# of a payee.
This is a first notice. The payor thought he had the correct TIN#. This notice is for
the 2006 tax year, the client had no relationship with this payee in 2007 and will not
do any business with this individual in the future. Is it still necessary to send a Form
W-9 to the payee to request the TIN and is it also necessary to send the payee the
First B Notice to advise payee of requirement to begin backup withholding? I have not
had any experience with these and would appreciate any thoughts.

Thanks, DixieEA

[Bees Knees]

The W-9 isn't necessary unless your client pays any future money to this person. The purpose of the IRS notice is to inform you that the TIN is bad, and any future payments to such individual will require backup withholding, unless a W9 is filled out with a correct TIN.

[DixieEA]

Thanks Bees, but would you still send the First B-Notice to the payee?

DixieEA

[Bees Knees]

No, not if I no longer do any business with the person. Let IRS send them a notice.