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JKCPA
JKCPA, CPA
Category: Tax
Satisfied Customers: 5699
Experience:  CPA with tax experience.
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I have received Notice Number CP276B. Taxpayer ID # is 59-0949258.

Resolved Question:

I have received Notice Number: CP276B. Taxpayer ID # XXXXX XXXXX I pay my payroll taxes with the EFTPS system and I don't understand why or how I am being late with payments. The deposit penalty has been waived and I thank you for that but how do I avoid this in the future. I don't really understand page 22 in the (Circular E) Employer
s Tax Guide. I normally pay the taxes the same date as the paychecks. Can you give me a simple way to understand this? Thank you, XXXXX XXXXX Office Manager, Memorial UMC
Submitted: 4 years ago.
Category: Tax
Expert:  JKCPA replied 4 years ago.

Hello,

 

Thanks for using Justanswer.com.

 

I'd like to help but I have a few questions:

 

1) What form do you file for payroll tax? (941, 944, etc.)

2) If Form 941, what is shown on page 2, line 17 for your monthly tax liabilities or did you instead add a Schedule B (for semi-weekly depositors)?

3) If you do not know which deposit schedule you are on, what was your total Form 941 tax liabilities for the 3rd quarter 2008, 4th quarter 2008, 1st quarter 2009 and 2nd quarter 2009?

 

 

Customer: replied 4 years ago.

1) I file 941's

 

2) I do a schedule B

 

3) 3rd Quarter 2008 $21,097.78

4th Quarter 2008 $17,854.22

1st Quarter 2009 $19,219.98

2nd Quarter 2009 $17,256.40

Expert:  JKCPA replied 4 years ago.

OK, so you are definitely classified as on the semi-weekly deposit schedule since your lookback period 3rd quarter 2008 through 2nd quarter 2009 was over $50,000. This means that for wages paid on Saturday-Tuesday, deposit by the following Friday. For wages paid Wednesday-Friday, deposit by the following Wednesday. If you follow these rules, you'll always have at least 3 business days to deposit your payroll taxes timely. If you accumulate a tax liability of $100,000 or more on any day during a deposit period, you must deposit the tax by the next business day.

 

You indicated you normally deposit the taxes on the same date as your payroll. Therefore, if you do this, there should be no penalty. This CP notice may mean that you may be completing your Schedule B incorrectly. IRS uses the Schedule B information to determine if any deposits were late. Remember -deposit rules are based on the date wages are paid to your employees, not the date they earned the wages.

 

So for example, if employees were paid wages for the period ended 04/09/2010 on 04/16/2010. The payroll deposit is due by Wed. 04/21/2010. You want to be sure that you are using the 04/16/2010 date on Schedule B. Also, if you use EFTPS, you'll need to initiate the deposit one business day before the due date. So instead of Wed and Friday due dates, you'll need to initiate the payment in EFTPS by Tues. and Thurs. 8pm EDT.

 

Let me know if you have any questions.

Hope this helps,

 

 



Edited by JK_CPA on 6/2/2010 at 6:11 PM EST
Customer: replied 4 years ago.
Thanks so much for your reply. I didn't realize that IRS uses the schedule B to determine if any deposits are late. I use QuickBooks Pro for our accounting and payroll services and QucikBooks prepares our schedule B. Are you familar with QuickBooks and if so could it be that scedule B is being prepared wrong? I will and can call my QuickBooks person but thought you might know. Again, Thanks!
Expert:  JKCPA replied 4 years ago.

Quickbooks will go by the date of the paycheck you entered to prepare the Schedule B. So as long as you entered the payroll date correctly, it should be correct.

 

A good way to check if any deposits may have been "considered" late is to look at your Schedule B, then go into your EFTPS account. This account should show a listing of your payments for Form 941. Compare the dates/amounts on Schedule B with the dates/amounts in EFTPS. If they are within the deadlines I mentioned previously, they should be timely. You may be able to track down a deposit that may have been late. Also, IRS may have sent the notice in error due to a processing error in rare instances.

 

You may want to call IRS on their business help line at 1-800-829-4933 or the number shown on their notice. They should be able to help you track down the exact problem. It's good no penalty was charged but it is good to know what may have caused one to avoid it in the future.

 

Best regards,

 

JKCPA, CPA
Category: Tax
Satisfied Customers: 5699
Experience: CPA with tax experience.
JKCPA and 2 other Tax Specialists are ready to help you
Customer: replied 4 years ago.
Thank you very much for all your help!

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