Be On the Lookout -IRS 1099 TIN Mismatch Letters

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IRS Issues 1099 Mismatch letters

IRS 1099 TIN Mismatch Letters Issued 

Recently the IRS issued a series of 1099 TIN mismatch letters, also known as CP2100 and CP2100A notices for 2022 and 2023, indicating a ramp-up in enforcement and penalties related to 1099 filings. These notices can lead to significant compliance obligations.

The 1099 TIN mismatch notice is straightforward: the recipient’s name and the Employer Identification Number (EIN) or Social Security Number (SSN) listed on the 1099 form do not match IRS records. This mismatch can trigger several necessary actions to correct the discrepancy and avoid future issues.

Follow these steps after receiving a 1099 TIN mismatch notice:

  • Review Your Files

You should have a copy of the 1099 in question. Compare what you filed with what is on the notice. Additionally, you should have Form W-9, Request for Tax Identification Number and Certification, in your file.  This form will show the name, address, type of entity and tax identification number (“TIN”) or social security number. This form is not sent to the IRS.  You merely need to maintain a copy of this form in your files. The person issuing the W-9 will certify the information under penalty. Caution needs to be exercised when preparing the 1099’s.  These are machine-read or scanned documents. When preparing 1099’s use Courier print type, a 12 point font size and black ink.

  • Contact Your CPA if Needed

Give us a call at (312) 578-9300 if you need help handling the response. We can guide you through this process.

  • Preventing Future Notices

To minimize the risk of future TIN mismatch notices, you can proactively verify that your information matches IRS records

Given the increasing scrutiny by the IRS, maintaining a log of actions taken in response to each mismatch notice is advisable. This log should detail communications, corrections made, and other relevant actions for each affected vendor. This practice not only helps in staying organized but also prepares you for any potential IRS audits focusing on how mismatches are handled.

While receiving a 1099 TIN mismatch notice can be concerning, taking prompt and correct actions can mitigate any negative consequences.