Employers that receive a proposed penalty notice from IRS asking them to submit Schedule B (Form 941), Report of Tax Liability for Semiweekly Schedule Depositors, should do so – even if they previously sent in the form as required.

During the past few quarters, IRS erroneously sent many employers a notice proposing a federal tax deposit penalty (CP 207) because it said the Schedule B was missing. In fact, the agency says it had a problem with scanning technology and didn’t properly process the returns. The notice asks recipients to submit Schedule B, even though they’d already done so with their paper filed returns.

While resending the Schedule B will be a hassle, IRS needs the resubmission to correct the penalty issue, IRS Branch Chief Amy Stanton, Wage & Investment Division, told attendees of an Oct. 1 payroll teleconference. Employers should sign the notice and staple to it the resubmitted form.

Here are a few guidelines that’ll help IRS better use its scanning technology (and reduce the number of problems for you):

• Make sure your forms are legible, and
• Write within margins and on the lines.

The agency says it’ll have the problem resolved for third-quarter reporting.

Tags: Form 941, IRS, Schedule B