IRS Publication 1281: Backup Withholding for Missing or Incorrect Name/TIN

IRS Publication 1281 explains how backup withholding works when a payee’s name or Taxpayer Identification Number (TIN) is missing or does not match IRS records. The publication provides guidance for payers who file information returns and receive IRS mismatch notices.

What Is IRS Publication 1281?

Publication 1281, titled Backup Withholding for Missing and Incorrect Name/TIN(s), is an official IRS document that outlines the procedures payers must follow when payee identification information is missing or incorrect. It is most commonly used by businesses that file Forms 1099.

Official IRS PDF: IRS Publication 1281

When Backup Withholding Applies

Backup withholding may be required when:

• A payee fails to provide a TIN.
• The TIN provided is incorrect.
• The name and TIN combination does not match IRS records.
• The payee fails to certify that they are not subject to backup withholding.

When required, the IRS generally mandates withholding at a flat rate of 24% of reportable payments.

CP2100 and CP2100A Notices

If the IRS identifies missing or incorrect name/TIN combinations on filed information returns, it may issue a CP2100 or CP2100A notice. These notices list affected payees and explain what actions the payer must take.

• CP2100 is issued when 50 or more information returns contain errors.
• CP2100A is issued when fewer than 50 information returns contain errors.

IRS guidance: Understanding your CP2100 or CP2100A Notice

What Payers Are Required to Do

In general, payers must:

• Review the IRS notice and identify affected payees.
• Request corrected name and TIN information from payees.
• Send required notices, commonly referred to as “B-Notices”.
• Begin backup withholding on reportable payments when required.
• Stop backup withholding once IRS requirements are met.

Reporting Backup Withholding

When backup withholding is applied, the withheld federal income tax must be reported and paid to the IRS. Payers generally use Form 945, Annual Return of Withheld Federal Income Tax.

IRS reference: About Form 945

Why IRS Publication 1281 Matters

• Explains when backup withholding is required.
• Helps correct name/TIN mismatches identified by the IRS.
• Supports compliance with federal information reporting rules.
• Reduces the risk of penalties for incorrect reporting.

Summary

IRS Publication 1281 is a core compliance reference for payers that file information returns. It explains how to handle missing or incorrect name/TIN information, apply backup withholding, and respond to IRS CP2100 and CP2100A notices.

M. Spik

Editor
25 years of experience managing tax, accounting, payroll, and employment-related information portals. Editor of Accounting Portal since 2011.
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