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IMRS Monthly Overview – May 2014

The IMRS Monthly Overview provides synopses of some of the issues received and/or closed by the Issue Management Resolution System staff during the past month. The Monthly Overview informs the public about the work of IMRS and highlights issues that we think would be of most interest to external stakeholders.


Policy, Practice, Procedures

IMRS Issue 14-0001920 – Form 1041, U.S. Income Tax Return for Estates and Trusts, payment posting errors
Practitioner reports payments made by clients filing Forms 1041 are posting incorrectly, especially with short year or fiscal year returns.

Response: IRS is considering revising Form 1041-V, Payment Voucher, to allow for fiscal year and short year tax period ending dates. In the interim, taxpayers filing Forms 1041 for  tax periods ending in months other than December should mark out the tax year on the upper right-hand corner of Form 1041-V and write in the tax period ending date (MM/DD/YYYY). IRS is also considering changes to internal processing of delinquent Forms 1041-V to ensure payments are applied to tax periods on Forms 1041.

IMRS Issue 14-0001938 – Matching excess Medicare tax withholding
Practitioners’ clients are receiving IRS Letter 12C concerning IRS attempts to match federal tax withholding to box 2 of Form W-2 when additional withholdings on Form 8959 must also be considered. The recommendation is for the Service to suspend issuance of Letter 12C until Form 8959 is matched to line 62 of Form 1040.

Response: Thank you for bringing this issue to our attention. The Letter 12C is not generated systemically but prepared manually and according to established procedures. IRS recently revised procedures for verifying Medicare tax to prevent this from reoccurring. We apologize for the inconvenience.

NOTE: Current and previous reports are also available on this site. The monthly overviews are posted for this year through the current month. You can also access reports for issues closed in prior years on the same page.

We invite you to raise your issues/concerns with your local stakeholder liaison.

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Page Last Reviewed or Updated: 23-Oct-2014