Episode 47: Does the B Notice Wording Really Have to Be on the Envelope?
It’s “B” Notice season — and this week, we’re getting very specific about envelopes. When a payer receives a CP2100 notice from the IRS, one of the potential next steps is sending a “B” Notice to the payee. And the IRS has some very particular requirements for how that notice must be sent. Publication 1281 says the outer mailing envelope must include the words “Important Tax Return Document Enclosed” or “Important Tax Return Information Enclosed.” But what exactly does “on the outer mailing e...
It’s “B” Notice season — and this week, we’re getting very specific about envelopes.
When a payer receives a CP2100 notice from the IRS, one of the potential next steps is sending a “B” Notice to the payee. And the IRS has some very particular requirements for how that notice must be sent.
Publication 1281 says the outer mailing envelope must include the words “Important Tax Return Document Enclosed” or “Important Tax Return Information Enclosed.”
But what exactly does “on the outer mailing envelope” mean?
A recent Ask the Expert question raised an interesting alternative: Could the required wording simply be printed on a document inside a window envelope, positioned so that the words are clearly visible through the window?
It sounds like an incredibly minor detail. But for an organization sending large numbers of “B” Notices, changing the mailing process or purchasing specially printed envelopes can have real operational and cost implications.
In this episode of Information Return Intelligence, Jason Dinesen looks at what Publication 1281 actually requires, how the regulations point payers back to IRS-established procedures, and why the safest reading is also the most literal one: put the required wording on the outer mailing envelope itself.
We also cover an important reminder that can easily get overlooked in an increasingly electronic world: under the current procedures, “B” Notices still have to be sent by mail.
It’s a short episode about a very narrow question — but sometimes those tiny procedural details are exactly where information reporting gets interesting.
Information Return Intelligence is sponsored by the Institute of Finance & Management (IOFM) and produced by Dinesen Media Ventures.
Welcome to Information Return Intelligence, the weekly podcast all about 1099s. My name is Jason Dinison. This week we're talking more about B notices, which we've talked about before, but someone asked me a question that I thought was interesting about the required wording that's supposed to be on the envelope that you send. And does that have to be on the outer mailing envelope or could you put it inside the envelope? That sounds like a weird question. And I guess it kinda is, but we're gonna examine it today on the information return intelligence powered by IOFM. First are disclaimers, this is not tax advice, I'm not your accountant, so never make final decisions based on anything you see or hear on this podcast. Always pay your own advisors before you make final decisions. This question came up in Ask the Expert recently, and it was interesting enough and also timely enough with it being CP twenty one hundred letter and B notice season that I wanted to do an episode on it. And so the question related to required wording that has to be on the envelope. So when you send a B notice, we've talked about this process before that you send a B notice. When you get a CP twenty one hundred letter, that's your response is to send a B notice. And it has to be sent by mail, by the way. And in that recent episode where we talked about CP twenty one hundred letters and B notices, we didn't mention that really, that your B notice has to be sent by mail. We might have mentioned it offhand. But it does have to be sent by mail. And there's required wording that has to be on the envelope. It has to say you have to write on the envelope important tax return information enclosed or important tax return document enclosed. So you can purchase envelopes that have that printed on them already. You can write it on by hand or stamp it, however, I mean the IRS doesn't specify how you get it on the envelope. They just say you have to have that on the envelope. That comes from publication twelve eighty one. And the quote in publication twelve eighty one starts with your outer mailing envelope. And that's the key to today's question. Someone asked do those words literally have to be on the outside of the envelope? Or could they put it on a piece of paper inside the envelope but showing through the mailing window on the envelope? And the reason that this person wanted to do it that way is they said it was more cost effective than getting that printed on the outer mailing envelope. It was easier just to print it on a piece of paper and make sure that it showed through the mailing envelope. We will answer this question, but first a word from our sponsor, IOFM. The Institute of Finance and Management, IOFM, is the leading organization providing training, education, and certification programs specifically for professionals and accounts payable, procure to pay, accounts receivable, and order to cash, as well as key tax and compliance resources for global and shared services professionals, controllers, and their finance and accounting teams. IOFM is the trusted source of information in the rapidly evolving field of financial operations. Check them out at IOFM.com. And now back to the show. So back to the question that was asked. Those required words that the IRS says have to be on the outer mailing envelope, what if you put it inside the envelope, printed on a piece of paper, and just made sure that that showed through the window on the envelope? And they said that would be cheaper than printing the words on the envelope itself. And by the way, just to reiterate, you have to mail B notices. That's still the procedure. I happen to think that the B notice procedure will change at some time down the road with some of the things that the iris system can do where it can do tin matching right away. That's a different discussion for a different day. I happen to think, and I'm not the only one who thinks this, that the B notice procedure will change at some point down the road. But it hasn't yet. Right now the procedure still is you have to mail B notices. And that means literally put it in the mail. You can't email it. And we've already talked about the publication twelve eighty one quote, which clearly says that those magic words important tax document enclosed have to be on the outside mailing envelope. Now publication twelve eighty one is not the law or the regulations, it's just an IRS publication. The thing is publication twelve eighty one is a little bit more than just an IRS publication in this situation. If we dig into the regulations, there's no answer to this, because the regulations just say that the IRS will establish procedures. And those procedures happen to be publication twelve eighty one. So we have to do what publication twelve eighty one says. And in the absence of anything saying to do something else or that it's okay to do something else, I think you have to go with a literal interpretation of publication twelve eighty one, and make sure that those magic words are on the outer mailing envelope. That's it for this week's information return intelligence, a nice short episode. Some of these episodes are like that, and that's okay. This is intended to be like a five minute to fifteen minute podcast. It's not intended for us to go on and on and on. But we do this every week talking about different things in the 1099 world. Information return intelligence is sponsored by IOFM and produced by Dynason Media Ventures. You can find all of our podcasts at podcasts.dynasonmedia.com. We'll talk to you again next week. Dynason Media Ventures.