Many taxpayers who made their next-day employment tax deposits on Tuesday, May 31, or semi-weekly employment tax deposits on Thursday, June 2, 2016, were incorrectly sent notices that their deposits were late.
Due to a programming error, IRS systems did not recognize changes in deposit due dates created by the Memorial Day holiday observed on May 30, 2016. As a result of the holiday observance, the next-day deposits that would have been due on Monday, May 30, were instead due on Tuesday, May 31, and the semi-weekly deposits that would have been due on Wednesday, June 1, 2016, were instead due on Thursday, June 2, 2016.
No taxpayer action is required. IRS systems have been corrected and impacted taxpayer accounts will be updated.
– Taxpayers who received a notice (CP161) of a failure-to-deposit penalty as a result of this error will receive a new notice of adjustment (CP210/220) stating the account was corrected and they do not owe a penalty.
– The initial Notice CP 161 was mailed dated August 8th 2016.
– The subsequent Penalty removal notice is expected to be sent within 30-45 days.
– Taxpayers who received a notice (CP276B) providing that their deposit was made incorrectly but that IRS waived the penalty will not receive any follow-up correspondence.
– These notices were also dated August 8, 2016 and should have been received around that date.
This error was due to a programming error with IRS and IRS has provided an announcement which also indicated impacted employers will have their accounts corrected. For more details: https://www.irs.gov/businesses/small-businesses-self-employed/memorial-day-ftd-penalty-error
Thank you for choosing Paylocity as your Payroll Tax partner. Should you have any questions please contact your Paylocity Account Manager.
This information is provided as a courtesy, may change and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney or Advisor.