Discussion:CP251 Notices 941 does not agree to W3
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| {{ForumReplyPost|UserID=Donniecastleman|Date=2 November 2009|Text=Yes, they are the owners on a sinking ship and have lost their tails since day one, though I looked up the correct withholding amount for doing $1K a month with 3 exemptions and it was zero, don't know if that helps but all of the other taxes have been paid that the 941 requires as well as 940, but there are a boatload of unpaid personal taxes that all happened before the entertainment support industry took a nosedive 2 years ago.}} | {{ForumReplyPost|UserID=Donniecastleman|Date=2 November 2009|Text=Yes, they are the owners on a sinking ship and have lost their tails since day one, though I looked up the correct withholding amount for doing $1K a month with 3 exemptions and it was zero, don't know if that helps but all of the other taxes have been paid that the 941 requires as well as 940, but there are a boatload of unpaid personal taxes that all happened before the entertainment support industry took a nosedive 2 years ago.}} | ||
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| + | {{ForumReplyPost|UserID=Donniecastleman|Date=2 November 2009|Text=And honestly, from day one from now on I'm asking for a W4 and doing the correct withholding, otherwise I won't be doing their quarterly payroll returns as I only have a handful and those are favors for clients with an S Corporation. It's not worth it.}} | ||
Revision as of 18:46, 2 November 2009
Discussion Forum Index --> Tax Questions --> CP251 Notices 941 does not agree to W3
| 29 August 2007 | |
| Alright, I have gotten two of these notices on separate clients within the last 3 months. It is a CP 251 notice stating that the total of the 2005 W2 forms sent to SSA does not match the total of the 941's filed with IRS. The notice lists the wages reported on all 4 941's and they are correct. So I call SSA on behalf of the client to find out the problem. In both cases, SSA processed several W2's under my client's EIN that do not belong to them. Has anyone else seen anything similar to this recently? | |
| 29 August 2007 | |
| Wow, I am just amazed how the SSA even spoke to you, congrats ! It was my experience that the SSA does not recognize a POA. The problem may arise with identity theft? Getting the IRS and the SSA on the right page can be a problem, beside a letter to SSA stating that the " SSA processed several W2's under my client's EIN that do not belong to them"? Then once that's cleared, send that notice from the SSA to IRS.
Good Luck | |
| 29 August 2007 | |
| Actually, SSA spoke to me without a POA (I must have caught them at a weak moment). SSA suggested that we send a W3-C & W2-C's with a letter of explanation. IRS suggested that we send copies of the corrected forms to them with a letter of explanation. We did this and within about 8-10 weeks we received a letter from IRS stating that the problem had been resolved on their end. We have not gotten word from SSA, but we also never received a notice from them in the first place. I had just never seen or heard of an issue like this and it seemed strange for it to happen to two clients within 3 months. | |
| 29 August 2007 | |
| Interesting, so why would you file a W2c and W3c if the originals were correct? Did the SSA provide you with the incorrect W-2s? BTW did you prepare the payroll reports? (W2, w3, 941) ?
Glad it all worked out, TexCPA 18:09, 29 August 2007 (CDT) | |
| 29 August 2007 | |
| I am very familiar with these notices. They are call CAWR (pronounced CAR) Assessments. They typically come out about 2 1/2 years after the end of the tax year in question. They are often erroneous. The IRS matches W-2's to W-3's and 941's and 940's. If there is any significant discrepancy, the IRS assumes that you owe additional tax. I had one a few months ago that appeared to show about $20,000 additional tax due. However, I produced copies of the four 941 returns and W-2's and W-3's to the Revenue Officer who promptly abated the tax in full. IRS employee hate these cases because they know they're often wrong. | |
| 30 August 2007 | |
| Tex - The SSA rep I spoke with was unable to view images of the W3/W2's but had summary info. The total wages were incorrect and the number of W2's processed was more than it should have been. I prepared corrected forms at the suggestion of the SSA rep. Since I could not see what the SSA had on file I wanted to be sure that the client's employee's wage reports from SSA were correct. Yes, we had prepared the payroll returns in this case as well as the W2's.
Steve - Thanks for your insight. It's good to know that these are relatively common. | |
Tonymontana (talk|edits) said: | 30 August 2007 |
| I had the similar case as Skasselea.
I sent the forms the client had to the IRS and they all matched. I sent a letter explaining that according to our records there was no discrepancy. I was told by the IRS rep that the letter and my client's copies would be sufficient to resolve the matter. If we did not hear from the IRS in 90 days from the date of my letter than the problem has been resolved. The 90 day mark is 9/8/07. No word from IRS yet. So far so good. | |
Donniecastleman (talk|edits) said: | 31 October 2009 |
| I'm dealing with the same thing with the CP-251. Can the IRS just pull an arbitrary number out of the air that they want to see withheld on a W-2 and make you change all of your forms from the 941 all the way to the personal tax returns to make it so? Reason being, I do W-2's for 3 clients that file the 941's and don't claim any federal withholding at all because they're usually broke and the payroll tax is enough of a bear to take care of. Anyway, I'm sending in copies of the 941's and W-2/W-3's showing no income tax withheld, especially since the year in question was only 6 months from the start-up date of July 2007. Hopefully this flies while the clients are struggling to get their business off the ground, comments? | |
| 31 October 2009 | |
| I'm thinking if the total W-2 wages for the year for an individual appear to be high enough that no withholding of income tax appears suspicious, IRS could request a copy of the W-4 form for that year. On the employer side of the issue: Isn't there a limit to how many exemptions you can claim to affect the amount of income tax withholding? Not being able to afford to pay it won't fly if this is questioned. If the wage amount is fairly low they probably wouldn't bother you about it. On the employee side of the issue: there is a penalty for failure to prepay your taxes in the "required amount" each year. | |
Death&Taxes (talk|edits) said: | 31 October 2009 |
| Read Publication 15, Pages 16-17 for the details. I can't remember when IRS discontinued asking for the W-4 if the employee claimed 10 or more. If you recall, the request was not instigated by IRS but was supposed to be part of employer procedure. I didn't save my old Circular E's but it was probably in there. IRS would generally write the employer after receiving the W-4 and tell them to withhold at Single, One exemption, but before this, had tried to contact the employee by mail to seek justification of the claimed allowances. I recall responding to several of these; they usually came from an office in Detroit. | |
| November 2, 2009 | |
| Donnie, I'm guessing these employees are owners, correct? Otherwise, the withholding is not theirs to begin with. | |
Donniecastleman (talk|edits) said: | 2 November 2009 |
| Yes, they are the owners on a sinking ship and have lost their tails since day one, though I looked up the correct withholding amount for doing $1K a month with 3 exemptions and it was zero, don't know if that helps but all of the other taxes have been paid that the 941 requires as well as 940, but there are a boatload of unpaid personal taxes that all happened before the entertainment support industry took a nosedive 2 years ago. | |
Donniecastleman (talk|edits) said: | 2 November 2009 |
| And honestly, from day one from now on I'm asking for a W4 and doing the correct withholding, otherwise I won't be doing their quarterly payroll returns as I only have a handful and those are favors for clients with an S Corporation. It's not worth it. | |
