What is a B Notice?

An IRS B Notice is a backup withholding notice. Advantis mails B Notices to members after being notified that a 1098 or 1099 filed with the IRS has either an incorrect, or missing, taxpayer ID number. The notice warns taxpayers that, unless they take certain steps before the deadline in the notice, the Credit Union will be required to withhold, and directly pay to the IRS, a specific percentage (currently 28%) of the interest paid on their credit union accounts.

There are two B Notices: a First B Notice, and a Second B Notice.

The first B Notice advises the member about the issue, asks the member to complete a W-9 and provides the name and tax payer identification number on file with the credit union. The notice also includes information explaining why there may be an error and how to resolve it. If a member doesn't return the completed W-9 by the deadline (usually 15 business days), we begin backup withholding. If a B Notice is returned undeliverable, we begin backup withholding immediately. We retain a copy of the undelivered notice.

If the member returns the First B notice, the Credit Union makes the corrections indicated and retains a copy of the newly completed W-9. There is no need to start backup withholding. 

A second B Notice is sent if the IRS notifies us twice within a 3 year period that we filed a 1098 or 1099 with a missing or incorrect taxpayer ID number for a member. The Second B Notice advises the member that they must have the IRS or Social Security Administration validate their taxpayer identification number and provide the validation document to the Credit Union by the deadline (usually 15 business days) to avoid backup withholding. 

What should I do if I get a B notice?

If you get a First B notice, return the completed and signed document to the credit union to avoid backup withholding.  While it's important to respond quickly, you should still take the time to ensure that the name and number are correct. 
  • If your taxpayer ID is your SSN, enter the name and the number on the W-9 exactly as it appears on your SSN card. 
  • If your taxpayer ID is an ITIN or an EIN, enter the name and the number exactly as it appears on document you received from the IRS assigning you the number.
  • If you've changed your name, you need to update your records with either the SSA, or the IRS.
If you get a second B notice, you must contact either the Social Security Administration, or the IRS, to get a document that validates your name and number combination. 

What if I don't return the W-9, or the validation documents, before the credit union begins backup withholding?

If you don't return the W-9 or the validation documents by the deadline, the credit union is required by the IRS to begin backup withholding.  However, if you are subject to backup withholding solely due to the TIN/name mismatch, we should be able to stop withholding when we receive the required documents.