What This Notice Means
Form 944, Employer's Annual Federal Tax Return, lets small employers report employment taxes once a year. Your annual employment tax liability was more than $1,000. That means you're no longer eligible to file Form 944.
Your filing requirement has changed. You now report employment taxes every quarter on Form 941, Employer's Quarterly Federal Tax Return.
What to Do
- Read the notice carefully. It explains the changes the IRS made.
- File Form 941 quarterly, beginning with the first quarter of the year.
- Review the Form 941 instructions before your first quarterly filing.
- If a payroll company, bookkeeper, or tax preparer handles your returns, send them a copy of the notice now so they switch you to quarterly filing.
This is a change in how often you report. It doesn't change your obligation to deposit employment taxes on time. Publication 15 (Circular E), Employer's Tax Guide, explains the deposit rules. Publication 966 explains how to use the Electronic Federal Tax Payment System.
If You Disagree
Contact the IRS within 30 days from the date of the notice. Use the number on your notice. Have your recent Form 944 filings and payroll records available so you can explain why you believe the change is wrong.
If you want to know exactly what triggered the change on your account, the same number is the place to ask.
Going Forward
- File the correct employment tax return by its due date.
- Attach all required forms and schedules.
- Consider filing electronically. It cuts down on errors.
- Keep this notice with your payroll records.
Employment taxes are an area where small problems grow fast. Get the filing schedule right from the first quarter and you avoid the mismatch notices that follow a wrong return.
If you received a CP250A notice and your payroll filings are out of order, call us at (813) 229-7100.