Payers making certain payments to payees, under certain conditions, must withhold and pay backup withholding to the IRS. Unless the payer can establish reasonable cause, failure to withhold, pay, or report as required can result in penalty and interest charges to the payer.

Backup withholding can apply to most kinds of payments that are reported on Form 1099. These include payments reported on Forms 1099-INT (interest), 1099 DIV (dividends), 1099-K ( payment card and third party network transactions), 1099-PATR (patronage dividends), 1099-MISC (rents, profits, other gains, royalties, payments to independent contractors, payments to fishing boat crews), 1099-B (payments by brokers/barter exchanges), 1099-OID (original issue discount), and Form W-2G (gambling winnings).

For backup withholding to apply, the payment must be subject to backup withholding and one of several conditions be present. For all types of reportable payments, backup withholding will apply if the payee fails to furnish a Taxpayer Identification Number (TIN) to the payer, or the IRS notifies the payer, on Form CP 2100 or CP2100A, to impose backup withholding because the payee furnished an incorrect TIN.

To avoid backup withholding on interest, dividend, broker, and barter exchange accounts opened or instruments acquired after 1983, the payee must provide a TIN and certify, under penalties of perjury, that the TIN is correct. If the payee is exempt from backup withholding, the payee must certify, under penalties of perjury, that it is exempt from backup withholding. If the payee has regularly underreported interest, dividends, or broker transactions, the IRS may send a “C” notice instructing the payer to begin backup withholding from the payee’s accounts.

A payer is who receives notice of an incorrect TIN (CP2100, CP, 2100A) or to begin backup withholding (“C” notice) is required to perform certain actions, either to attempt to acquire a correct TIN or begin backup withholding on payments to the payee.

This course describes the requirements related to backup withholding, the processes involved in compliance with the requirements including TIN solicitation, B-Notices, when to begin backup withholding, how to establish reasonable cause for penalty avoidance, abatement, or waiver, use of Form W-9 and Forms in the W-8 series, TIN verification, and dealing with IRS notices and penalties.

Course Objective:

Understand payee and payer responsibilities regarding backup withholding and the processes for compliance. This includes TIN solicitation and verification processes, responding to IRS notices and issuing required notices to payees (B-Notices), proper use of Forms W-9 and W-8, and knowing when and how much to withhold from payments.

• B-Notices: How to avoid penalties & fines
• Step-by-step instructions for TIN matching program: Prevent errors
• Beat IRS deadlines to respond to CP2100, CP2100A, and “C” notices
• How to protect your company: B-notice & TIN compliance essentials
• Establishing reasonable cause for noncompliant Forms 1099
• When and how to solicit payee TINs or exemption certificates

Course Outline:

• IRS matching process
• Penalties
• Establishing reasonable cause
• Solicitations
• TIN verification
• Notices
• Backup withholding

What You Get:

• Training Materials
• Live Q&A Session with our Expert
• Participation Certificate
• Access to Signup Community (Optional)
• Reward Points

Who Will Benefit:

• CFOs and controllers
• Accounts payable and accounting managers
• Accounts payable processing professionals
• Employers and Business owners
• Purchasing managers and professionals
• Public accountants, CPAs and Enrolled Agents