What This Form Means

Form 4668, Employment Tax Examination Changes Report, is the examiner's report at the end of an employment tax audit. It lists the proposed adjustments to your Social Security, Medicare, and income tax withholding for each period examined. A separate Form 4668 is prepared for each calendar year examined.

It usually arrives with Form 4666, Summary of Employment Tax Examination, Form 4667 for federal unemployment tax changes, and an agreement form.

Which Agreement Form You Get

  • Form 2504 or Form 2504-S for adjustments not subject to IRC 7436.
  • Form 2504-T for adjustments subject to IRC 7436, which covers worker classification and section 530 relief issues.

Each report is marked as non-7436 adjustments, 7436 worker classification issues, or 7436 wage issues. If both kinds of issues are present, you get separate reports.

What to Do

Go through every adjustment. Check the wages, the workers, and the periods against your payroll records.

  • If you agree, sign the agreement form and return it. The bottom of Form 4668 explains your Form W-2 and W-2c filing requirements for the adjusted wages. Those corrections go to the Social Security Administration. The IRS does not forward Form 4668 to SSA for you.
  • If you disagree, the unagreed report comes with a 30-day letter, such as Letter 950-C or Letter 950-D, explaining your right to appeal. File a protest by the date in that letter.

Worker Classification Cases

If the changes involve reclassifying workers as employees and you don't protest, the IRS doesn't simply assess. It issues Letter 3523, Notice of Employment Tax Determination, which gives you the right to petition the U.S. Tax Court. Watch that deadline closely.

Keep copies of everything and respond in writing.

If you received Form 4668 and disagree with the proposed employment tax changes, call us at (813) 229-7100.