Incorrect Filing Instructions Prompt IRS Apology to 25,000

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By Michael Trimarchi

About 25,000 employers were affected by an Internal Revenue Service computer programming error that produced notices with incorrect filing statuses for employment tax forms, an official said April 30.

The incorrect instructions informed the employers that they were to deposit and file taxes according to requirements of Form 944, Employer's Annual Federal Tax Return, instead of using the quarterly Form 941, Employer's Quarterly Federal Tax Return, senior IRS tax analyst Judy Davis said in a monthly teleconference with payroll professionals.

Because of the error, some employers may not have had time to file first-quarter employment tax returns as required by April 30 and payments for some others may not have been posted correctly, Davis said.

Penalties could result for employers unable to file on time, Davis said. The payments by some employers that were not posted properly because of the incorrect instructions were being resolved by the IRS and the payments were to be transferred to the proper accounts, she said.

An apology letter, 3007-C, was sent in late April to affected employers stating the correct filing status, Davis said. Employers were given the name and phone number of an IRS contact for more information.

Employers that were incorrectly penalized because they missed filing deadlines would receive assistance from the IRS, which would remove the penalty, Davis said. “Please note that you will be provided with your correct filing requirement, which would be a 941 in this case, and you should for the remainder of the year file on a quarterly basis, unless you hear something different from the IRS in writing,” she said.

To contact the reporter on this story: Michael Trimarchi in Washington at