The IRS today posted a statement indicating that it was aware that a “small population of employers” that reduced their tax deposits in anticipation of claiming the sick and family leave credits or employee retention credit may have received a notice stating that there was a failure-to-deposit penalty applicable to the Form 941 on which the credits were claimed.
The credits were made available by U.S. legislation enacted earlier in 2020 in response to the coronavirus (COVID-19) pandemic.
According to the IRS statement (August 21, 2020):
Today’s IRS statement explains that while the IRS has taken steps to implement rules that prevent the failure to deposit penalty from incurring on employers reducing their deposits in anticipation of these credits, the IRS has become aware some employers may still have inadvertently received notice of the penalty. The IRS stated that it is taking actions to identify these employer accounts and correct them as soon as possible.
The IRS release concludes that employers that have recently received these notices do not need to take additional actions at this time.
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