B-notice information

What is a B-notice?

Types of B-notices

How to resolve a B-notice

B-notices at M1

 

What is a B-notice?

A B-notice is a letter issued when the name and Social Security Number (SSN) or Tax Identification Number (TIN) combination provided on a tax document does not match the Internal Revenue Service (IRS) record for an account owner.

If the incorrect name and SSN/TIN combination remains unresolved, the account for which the B-notice has been issued is automatically subject to 24% backup withholding. Backup withholding applies to any dividend or interest payments made into your account, as well as any cash received from trading securities within your account. Backup withholding will automatically be withheld if the incorrect name and SSN/TIN combination on an account is not corrected, per IRS instruction.

B-notices are issued based on M1’s receipt of Notice CP2100 and CP2100A which are provided directly by the IRS. Please note that the current backup withholding rate of 24% is subject to change based on IRS guidance.

 

Types of B-notices

Apex Clearing issues three types of B-notices: first, second, and final. Upon receiving a first or second B-notice, you are allotted approximately 15 days to resolve your incorrect name and SSN/TIN combination before your account becomes subject to backup withholding. However, upon receipt of a final B-notice, backup withholding is applied to your account immediately. Final B-notices are issued when an account owner fails to respond to a first and second notice.

 

How to resolve a B-notice

If your account has been issued a B-notice, you will receive a mailed copy of the letter from Apex Clearing and you will also receive an email directly from M1. 

These notifications will contain instructions on how to resolve your B-notice based on which type of B-notice you’ve received (first, second, or final). The table below has listed the documents required to resolve a B-notice, but please note that our clearing firm reserves the right to request additional documentation if the documentation provided is insufficient to resolve the B-notice.

If your account is:

If your notice type is:

Documents required:

An individual (SSN)

First

Signed Form W-9

Second

Copy of your SSN card

Final

Copy of your SSN card

Non-individuals, entities, and certain sole proprietors (EIN/TIN)

First

Signed Form W-9

Second

Copy of letter 147C

Final

Copy of letter 147C

Additional information about the required documentation will be provided in the notifications sent from Apex Clearing and M1 and can also be found at IRS.gov.

 

B-notices at M1

These notifications will contain a deadline to resolve your B-notice by. If correct documentation is provided by the deadline to resolve your name and SSN/TIN combination mismatch, no action will be taken within your account and your account will no longer be subject to backup withholding under B-notice guidelines. 

If no documentation is provided by the deadline mentioned, M1 will pause your account to prevent any trades from occurring within your account that would be subject to backup withholding. Please note that the deadline to resolve a B-notice varies each year. You may refer to the notifications that you receive from Apex Clearing and M1 for deadline confirmation.

If you have further questions, please reply directly to the message sent to the email associated with your M1 account. Our Client Success team is available to assist you in resolving your B-notice.

 

M1 and its affiliates do not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only. It is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any transaction.

 

M1 disclosures here.

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