Refund Consent Forms Must Include Claim Basis, IRS Says

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By Keith M. Hill

A new procedure on requirements for employee consents used to support claims for refund of employment taxes and stating that an employee consent must identify the basis of the claim for refund was proposed Feb. 13 by the Internal Revenue Service.

The procedure proposed in Notice 2015-15 deals with refunds for overpaid taxes under the Federal Insurance Contributions Act and the Railroad Retirement Tax Act under tax code Section 6402.

The proposed revenue procedure seeks to clarify questions that have arisen concerning what information must be provided in an employee consent and whether an employee consent may be requested, furnished and retained in an electronic format, the notice said.

Employers may not receive refunds of the employer share of overpaid FICA tax without making reasonable efforts to protect their employees' interests, the notice said.

“In addition to providing the relevant name, address and taxpayer identification number, a valid employee consent must identify the basis of the claim for refund and be signed by the employee under penalties of perjury,” the notice said. Guidance is provided in the proposed revenue procedure concerning what constitutes “reasonable efforts” to secure an employee consent when a consent is not obtained.

Specific Instructions

The request must specifically ask the employee to click on a voting button that says “yes” or send a reply message to the employer, the notice said, adding that a read-receipt message is not sufficient.

The proposed revenue procedure would permit, but would not require, the employee consent to be requested, furnished and retained in an electronic format, the notice said.

Comments on the proposed revenue procedure may be submitted on or before April 31, 2015 to: Internal Revenue Service, CC:PA:LPD:PR (Notice 2015-15), Room 5203, P.O. Box 7604, Ben Franklin Station, Washington, D.C. 20224.

To contact the reporter on this story: Keith M. Hill in Washington at khill@bna.com

To contact the editor on this story: Michael Trimarchi at mtrimarchi@bna.com.