What This Letter Means
Letter 2057C goes to employers in the Combined Annual Wage Reporting (CAWR) program. CAWR compares what you reported to the IRS on your employment tax returns (Forms 941, 943, 944, and Schedule H) with the Forms W-2 filed with the Social Security Administration. It looks at wages, Medicare wages, Social Security wages and tips, and federal income tax withheld.
When the numbers don't match, the IRS first sends Letter 99C or Letter 98C. Letter 2057C is used in the reply and late reply phase, after you respond. Its content depends on the paragraphs the IRS selects for your case.
What It Can Tell You
- The case is closed. The letter explains the actions the IRS took on your account based on your reply.
- Your reply wasn't enough. The letter explains why and asks for the forms needed to resolve the discrepancy, such as missing or corrected Forms W-2 or W-2c.
- More detail is needed. For example, a breakdown of how the wages were paid.
- A penalty or assessment applies. The letter explains the penalty or adjustment.
- Ownership changed. If you said a prior owner is responsible, the letter may explain that the corporation stays liable regardless of who owns it, or that a new owner of a non-corporate business should have obtained a new EIN.
What to Do
- Read the letter for the year and the specific finding.
- If it asks for documents, send them by the date in the letter. Include a copy of the letter.
- If it closes the case with an assessment or penalty you disagree with, write back with the records that prove the correct figures. Payroll registers, filed W-2s and W-3, and filed 94X returns are the core proof.
- If a balance results, pay it or set up a payment arrangement to stop interest.
Keep copies of everything you send. If a payroll company filed your returns, get their filing records before you reply.
If you received Letter 2057C about a wage reporting mismatch, call us at (813) 229-7100.