We didn't receive the correct amount of timely tax deposits. We normally charge a Federal Tax Deposit penalty when this happens. We decided not to do so this time.
What you need to do
- Review your records to see if you are paying your current payroll taxes on time.
- Correct the copy of your tax return and the tax liability schedule that you kept for your records.
You may want to
- View our instructions for employment taxes.
- Check your current tax deposits to verify they are correct.
- Complete and send us a Form 2848, Power of Attorney and Declaration of Representative (PDF) to authorize someone (such as an accountant) to contact us on your behalf.
Answers to common questions
Do I have to reply to this notice?
No, but you should check your records to see why your tax deposits were incorrect.
How do I know whether I should make monthly or semiweekly payroll tax deposits?
Go back and look at the total tax liability for the four quarters before the quarter ending in June of last year if you file a quarterly return. Annual return filers should go back and look at the total tax liability of the year before their previous filing year.
For either a quarterly or an annual filer, a total tax liability of $50,000 or less means you can make your federal payroll tax deposits monthly. A tax liability greater than $50,000 means you have to make semiweekly payroll tax deposits.
When are my payroll tax deposits due?
The following table shows the schedule for semiweekly payroll tax deposits:
|The payroll tax liability period is Saturday, Sunday, Monday, and Tuesday||Make the tax deposit by the following Friday.|
|The payroll tax liability period is Wednesday, Thursday, and Friday||Make the tax deposit by the following Wednesday.|
|A holiday falls on a weekday after the payroll tax liability period and before or on the normal deposit day||Extend the deposit due date one business day for each day of holiday.|
Monthly payroll tax depositors must make their tax deposits by the fifteenth of each month. When the fifteenth falls on a Saturday, a Sunday, or a legal holiday, tax deposits are due on the next business day.
Do I have to make my payroll tax deposits electronically?
Normally, yes. However, you may send your payment in with your tax return when your tax liability is less than $2,500. If you file a quarterly tax return, another time when you may send in your payment with your return is when:
- Your tax liabilities never totaled $100,000 or more in a deposit period, and
- Your tax liability in the preceding quarter was less than $2,500.
Tips for next time you file
- Report each tax liability (not your deposits) on the tax liability schedule.
- Make sure that that the amount on your tax liability schedule matches the payroll tax amount on your tax return.
- Do not list negative amounts on your tax liability schedule.
Tax publications you may find useful
- Publication 1, Your Rights as a Taxpayer (PDF)
- Publication 15, (Circular E) Employers Tax Guide (PDF)
- Publication 594, The IRS Collection Process (PDF)
- Publication 4169, Tax Professional Guide to the Electronic Federal Tax Payment System (PDF)
- Form 9465, Installment Agreement Request (PDF)
- Notice 746, Information About Your Notice, Penalty and Interest (PDF)
- Full list of tax forms and instructions
How to get help
- Call the 800, 866 or 888 number listed on the top right corner of your notice.
- Authorize someone (such as an accountant) to contact the IRS on your behalf using Form 2848, Power of Attorney and Declaration of Representative (PDF).
- See if you qualify for help from a Low Income Taxpayer Clinic.