We get it—you’re probably juggling a thousand tasks—making sure vendors get paid, employees are onboarded, and compliance boxes are checked. But there’s one small data point that can cause a surprisingly big problem if it’s incorrect: the Taxpayer Identification Number (TIN).
So, what happens if you get a TIN wrong on a Form 1099 or W-9? And more importantly—how can you fix it quickly to avoid penalties and keep your business in good standing with the IRS?
What Happens if I Submitted the Wrong TIN?
A Taxpayer Identification Number (TIN) is used by the IRS to match income payments to the correct person or business entity. If you report a payment with the wrong TIN or name combination, the IRS flags it as a mismatch. And that’s where the trouble starts.
There are a few potential scenarios that can occur when a TIN is entered incorrectly or doesn’t match IRS records:
You may receive a CP2100 or CP2100A Notice
The IRS sends these notices to payers who filed one or more information returns (like 1099s) with a name/TIN mismatch. This notice alerts you that the TIN and name combination provided does not match IRS records.
You could be subject to backup withholding
If the issue isn’t resolved in a timely fashion, the IRS requires you to begin backup withholding at a flat 24% on future payments to the affected vendor or contractor. That’s a compliance headache and a potential vendor relationship risk.
You may be hit with penalties
Incorrect TINs can result in financial penalties up to $310 per return, and even more if the IRS deems the error as intentional disregard. Multiply that across a handful of vendors and you’re looking at thousands in unexpected costs.
You lose time fixing avoidable mistakes
For small teams managing a long list of vendors, contractors, and freelance workers, even one bad TIN can pull you away from more strategic work.
How to Correct a TIN Error with the IRS
If you’ve received a notice or discovered an error, don’t panic. Here’s how to course-correct:
Step 1: Review the IRS Notice
When you receive a CP2100 or CP2100A, review it to identify the payee(s) with incorrect TINs. Match the recipient data in the notice to your records.
Step 2: Solicit Corrected Information from Payee
When a “B Notice” is received, you must solicit corrected information from the affected payee within 15 business days of receiving the IRS notice. This informs them of the mismatch and asks them to provide a corrected TIN.
For the first B Notice: Provide a Form W-9 and request they fill it out with the correct name/TIN.
For the second B Notice (if it happens again in a three-year period): The payee must contact the IRS directly and obtain official validation (usually a letter from the IRS).
Step 3: Begin backup withholding (if necessary)
If the payee fails to respond or submit a correct W-9 within 30 business days of your B Notice, you are required to begin backup withholding.
Step 4: Update internal records
Once you receive the corrected W-9, update your records and systems immediately to prevent the same error next filing cycle.
Step 5: Submit a Corrected Information Return
If you’ve already submitted a Form 1099 with the wrong TIN, you’ll need to file a corrected return with the IRS.
How to Prevent a Future TIN Mismatch
Let’s be honest: manually entering TINs or relying on vendors to complete forms correctly is a recipe for risk. You can avoid all of this by validating TINs before filing—and even before onboarding a new vendor. That’s where TINCheck comes in.
TINCheck by Sovos is built for busy professionals like you—those managing tax compliance with lean teams, limited bandwidth and a lot to lose if something slips through the cracks. With Real-Time and Bulk TINCheck, organizations can:
- Instantly validate vendor TINs and names against IRS records
- Automate your onboarding and compliance processes
- Reduce the risk of backup withholding and penalties
- Stay confident that your 1099 filings are accurate
Ready to safeguard your business from TIN errors? Learn more about TINCheck today.
Frequently Asked Questions (FAQ) About TIN Errors
How do I know if the IRS has flagged a TIN?
The IRS will send a CP2100 or CP2100A Notice if one or more of your filed information returns have incorrect TINs. These notices are typically sent twice a year—usually in April and October—based on 1099 filings from the previous calendar year.
What happens if I don’t respond to a TIN error notice?
Ignoring a CP2100 notice can result in backup withholding requirements and potential IRS penalties for non-compliance. You are also legally obligated to begin withholding 24% from future payments if corrected information isn’t received within 30 business days.
Who should be responsible for TIN compliance in my organization?
Typically, this responsibility falls under the Finance, HR, or Accounts Payable teams—anyone involved in vendor onboarding, payroll, or year-end tax reporting. But with automation tools, TIN validation can become a simple part of your everyday process.
Is TINCheck compliant with IRS regulations?
Yes. TINCheck by Sovos is built with IRS compliance in mind. It leverages IRS TIN Matching and also includes optional checks against OFAC and other sanctions lists—providing a comprehensive risk management solution.