The most comprehensive resource available for payroll professionals. This service provides payroll news, white papers, custom research answers, webinars on the hottest payroll topics, survey and research reports, in addition to access to Bloomberg BNA’s Payroll Library™.
By Mike Baer
Representatives from payroll service providers that deposit taxes on behalf of thousands of clients asked Internal Revenue Service officials Sept. 1 about steps to prevent the recurrence of erroneous tax deposit penalty notices that were sent to clients after at least two federal tax holidays.
John Myett, director of government affairs at ADP, LLC, told IRS officials in a teleconference Sept. 1 that the erroneous penalty notices related to changed holiday deadlines were a troubling development. The notices were sent to affected clients after Monday holidays this year for Emancipation Day on April 18 and Memorial Day on May 30.
A notice saying that a programming error resulted in IRS systems not recognizing changes in deposit due dates created by Memorial Day was issued Aug. 4 by the IRS. Notices sent to employers because of the error were rescinded and corrected, the agency said. A similar statement was issued after erroneous penalty notices were sent following the Emancipation Day holiday.
Myett was concerned about the changed deposit due dates for Labor Day on Sept. 5 and suggested that the IRS issue a statement explaining that “actions are being taken” to prevent future errors.
The IRS penalty department reviewed the issue for the remaining holidays this year and believes the problem was resolved, said Scott Mezistrano of the agency's industry engagement and strategy group. He noted that the error did not occur after this year's Independence Day holiday and that he had no information as to the total number of employers affected by the erroneous notices.
Another payroll service provider representative said that after the erroneous penalty notices, clients calling IRS for explanations and help were told that their service providers had made late payments. The IRS explanation was incorrect, the representative said.
A communication of the issue was sent to IRS call-center employees, said Mezistrano, who apologized that misinformation about the problem could possibly taint the credibility of the service providers with clients that rely on payroll tax deposit services.
Myett asked the IRS for an explanation of steps taken to resolve the issue.
For the Emancipation Day error, IRS said that employers receiving a CP161 notice with a failure-to-deposit penalty as a result were to receive follow-up correspondence indicating they do not owe a penalty. Those receiving a CP276B notice regarding an incorrect deposit that said IRS waived the penalty would not receive any follow-up correspondence.
For the Memorial Day error, IRS said those who received a CP161 notice would receive a new notice of adjustment CP210/220 stating the account was corrected and they do not owe a penalty. Employers receiving a CP276B notice that said the IRS waived the penalty would not receive any follow-up correspondence.To contact the reporter on this story: Mike Baer at email@example.com To contact the editor responsible for this story: Michael Trimarchi at firstname.lastname@example.org
Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)