Letter 4552C is a third-party inquiry. The IRS sends it to a payer, such as the company that issued a Form 1099 or a Schedule K-1, or to someone named as a nominee recipient of income. Its purpose is to clarify income reported for a business taxpayer whose return the IRS is matching against information returns. You are being asked for information. The inquiry isn't about your own tax.
When the IRS Sends It
- Payer inquiries. The business under review disputes an amount, for example by providing a corrected K-1 without a letter from the issuer, and the IRS finds no amended partnership, S corporation, or trust return on file. The IRS asks the payer to confirm.
- Nominee inquiries. The business says it received income on behalf of someone else. The IRS asks that person or entity to confirm or deny the arrangement.
Before contacting you, the IRS notifies the business under review that it plans to contact a third party, then waits at least 46 days.
What to Do
- Pull your records for the payment and tax year in the letter.
- Complete the form and return it by the date in the letter.
- If the information return you filed was wrong, say so and file a corrected one.
- If you're named as a nominee recipient, state plainly whether the arrangement existed.
- Keep a copy of everything you send.
If You Don't Respond
The IRS continues its case against the business using the information it already has. If you're the nominee recipient and you don't confirm the arrangement, the IRS treats the nominee claim as unconfirmed.
If You're the Business Under Review
You won't get this letter. You'll get notice that the IRS is contacting a payer or nominee, and later a letter with the result.
If the IRS is matching your business income against 1099s or K-1s and you need help, call us at (813) 229-7100.