Payroll Tax – IRS CP259 – missing 941 form but Payroll Tax Deposit timely made.

[Santiago Muinos]

Hey all,

Just got a client that received a CP259 Notice for 2Q 2018. Deposit was timely made but apparently the IRS did not process/receive the quarterly 941 return. Client claims it was sent, but did not send it via Certified Mail.

Just to be clear:

1. There should no failure to file penalty in this case if the actual deposit was timely made, thus there is no tax due.

2. Therefore, it becomes a case of filing the return pursuant to the notice letter for matching purposes when the client files the W-2 for 2018.

However, my question is how to approach the “reasons why you didn’t file” on page 2 – i.e. what proof does the taxpayer really have, or does it even matter if the deposit was timely paid over in the first place.

What I’m thinking: Send in a copy of the return that was presumably mailed, and state that the client sent it in via regular mail and attach the timely proof of deposit with EFTPS.

Am I missing anything here?

Thanks in advance for you help!
-s

[Steven Diamond]

I would do exactly what you suggested. If the client has no prior history of filing late, it’s probably a slam dunk for abatement of any penalty. However, I do not believe that timely depositing the taxes would in and of itself be reasonable cause but would certainly be a favorable factor.

Steve D

[Steven Diamond]

[Eric Green]

I agree with your approach and with Steve. At the end of the day it only matters if there is a penalty and they wanted to seek abatement for reasonable cause.

[Author]

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