What This Letter Means
Letter 3850, Employment Tax Appointment Letter, tells your business that an IRS employment tax examiner is examining your employment tax returns and has scheduled an appointment for an interview. Employment tax audits look at things like Forms 941 and 940, worker classification, fringe benefits, tip reporting and withholding.
The IRS also sends Letter 3850 when it first sent a call-in letter, Letter 3851, and you didn't call to set a time.
What Comes With It
- Publication 1, Your Rights as a Taxpayer.
- Publication 5146, Employment Tax Returns: Examinations and Appeal Rights.
- Notice 609, Privacy Act Notice.
- Form 4564, Information Document Request (IDR), listing the records the examiner wants, the periods covered and how and when to provide them.
What to Do
- Note the date, time and place of the appointment. If it doesn't work, call the examiner at the number on the letter right away to reschedule.
- Read the IDR. Start gathering payroll records, Forms W-2 and 1099, contracts with workers and the other items listed.
- Read Publication 5146 so you know your appeal rights.
- Decide who will attend. You can have a representative handle the examination using Form 2848.
Why It Matters
Employment tax audits can produce large assessments, especially when workers paid as contractors are reclassified as employees. Penalties can apply too. How you handle the first interview shapes the rest of the case. Prepare before you sit down with the examiner.
If your business received Letter 3850 and you want representation for the employment tax audit, call us at (813) 229-7100.