Failure to Deposit Penalty

The IRS is aware that a small population of employers that reduced their tax deposits in anticipation of claiming the sick and family leave credits, or employee retention credit, may have received a notice stating there was a failure to deposit penalty applicable to the Form 941 on which the credits were claimed. Under Notice…

Auditing for Due Diligence Compliance

The IRS plans to conduct due diligence audits in the coming weeks. These audits will be conducted via correspondence only due to COVID-19. Tax preparers will be contacted with Letter 6222-A, Correspondence Due Diligence IDR, to initiate a due diligence audit. The IRS website contains the following information on due diligence audits. Auditing for Due…

Deferral of Payroll Taxes Update

On August 8, 2020, the President issued a memorandum directing the IRS to use its authority under IRC section 7508A to defer the withholding, deposit, and payment of the employee’s share of Social Security taxes (the 6.2% FICA tax that is withheld from employee wages). The IRS recently issued guidance stating that employers who are…