What This Letter Means
Letter 3851, Employment Tax Call-in Appointment, means the IRS has selected your business's employment tax returns for examination. Instead of setting a date for you, the examiner is asking you to call in and schedule the interview.
The IRS also uses this letter to start employer tip examinations, where it reviews how tip income was reported for Social Security and Medicare tax purposes.
The initial contact letter generally comes with Publication 1, Your Rights as a Taxpayer, Notice 609, Privacy Act Notice, and Publication 5146, which explains employment tax examinations and appeal rights.
What Happens When You Call
- The examiner discusses the documents needed for the exam.
- The examiner then sends Letter 3253, Taxpayer Appointment Confirmation, confirming the appointment.
- That letter includes Form 4564, Information Document Request, listing the records you need to have ready.
If you don't call, the examiner sends Letter 3850 to schedule the appointment for you.
Time and Place
The examiner has the right to set the time and place of the exam, but it must be reasonable. The examiner will try to accommodate reasonable requests, so ask for a time and location that works for your business.
What to Do
- Call the number in the letter promptly.
- Start pulling payroll records for the periods listed: Forms 941 and 940, Forms W-2 and W-3, Forms 1099, payroll registers, and deposit records.
- Identify every worker you paid as an independent contractor. Worker classification can be an issue in these exams.
- Consider having a representative handle the contact. You can authorize one with Form 2848.
If you received Letter 3851 and want a representative at your employment tax exam, call us at (813) 229-7100.