IRS NOTICE REFERENCE
Understanding your CP543 notice
This notice informs you that you must begin backup withholding (BWH) interest or dividend income for the payees (taxpayers) listed on your notice. The taxpayers listed on your notice owe money to the IRS. As a payer, you…
General information only. Not legal or tax advice.
Notice details
- Notice code
- CP543
- Category
- Penalty
- Severity tier
- Tier 2 — Action or response expected. The IRS has taken or proposed an action and expects a response or payment.
- Governing law
- §6721; §6722; §6751 (Internal Revenue Code sections)
- Statutory response window
- 30-day window — always confirm the exact deadline against the date printed on your notice.
- Source
- IRS.gov — Understanding Your IRS Notice
What this notice is
This notice informs you that you must begin backup withholding (BWH) interest or dividend income for the payees (taxpayers) listed on your notice. The taxpayers listed on your notice owe money to the IRS. As a payer, you can withhold some of their income to pay off their balance.
Source: IRS.gov. Reproduced for reference. General information — not legal or tax advice.
What the IRS says to do
Start BWH at a rate of 28% for dividends, patronage dividends and interest payments you make to the taxpayers listed on your notice. You must begin BWH within 30 days of your notice date. Continue until we tell you in writing to stop. Failure to do so may result in a tax liability and criminal or civil penalties. You must begin BWH within 30 days of your notice date. Continue until we tell you in writing to stop. Failure to do so may result in a tax liability and criminal or civil penalties. Report your withholding on Form 945, Annual Return of Withheld Federal Income Tax . Protect the payee's (taxpayer's) information or you could be subject to civil damages for unauthorized disclosure (Internal Revenue Code Section 7431).
This is the IRS’s own guidance reproduced from the IRS notice page. It describes the IRS’s process — it is not legal or tax advice from TaxRiskOS.
Governing IRS procedure (Internal Revenue Manual)
The IRS’s own internal procedures for handling this notice type are documented in the Internal Revenue Manual:
Reference to published IRS procedure. General information — not legal or tax advice.
Official IRS reference
Read the official notice page on IRS.gov: https://www.irs.gov/individuals/understanding-your-cp543-notice
Related tools
TaxRiskOS is workflow software for practitioners — it captures the notice, computes the deadline, surfaces the escalation tier, and builds a document checklist. It documents process; it does not give advice or draft responses.
Check this notice’s deadline (free tool)