What This Form Means
Form 4667, Examination Changes - Federal Unemployment Tax, is the basic report form for an IRS examination of Form 940. It summarizes the changes the examiner made to your business's FUTA liability.
It often arrives with other employment tax report forms, like Form 4666 and Form 4668, and an agreement form such as Form 2504. If you didn't agree with the examiner, the report comes with a 30-day letter explaining your appeal rights.
What to Look For
- Type of adjustment. A box at the top shows whether the changes are Non-7436 Adjustments, 7436 Adjustments (Worker Classification Issue) or 7436 Adjustments (Wage Issue). Worker classification cases carry special rights, including Tax Court review under section 7436.
- State taxable wages and state credit. FUTA credit depends on state unemployment contributions and on whether you paid them on time. Check the corrected state payroll and credit figures carefully.
- Totals. If separate reports were prepared for different types of issues, make sure the totals make sense together.
What to Do
- Compare the report to your Forms 940, state unemployment returns and proof of state payments.
- If you agree, sign the agreement form as directed.
- If you disagree, use the appeal rights in the cover letter and Publication 5146. Pay attention to the response date in that letter.
- If you agree with some issues and not others, a partial agreement is possible.
Why It Matters
Signing the agreement allows the IRS to assess the tax. Once that happens, your options to contest it narrow. If other employment tax reports came with it, review the whole package together before you sign anything.
If your business received Form 4667 after an employment tax audit, call us at (813) 229-7100.