When a business owner receives a notice letter from the IRS or state tax agency, it can be confusing at best and overwhelming at worst. These letters aren't written to be friendly and can be hard to understand. Receiving an intimidating letter from a tax agency will almost certainly bring anxiety and can make support teams nervous - but don't worry, we're here to help! We've assisted businesses in resolving these tax letters for over a decade. Believe us when we say we've seen it all.
So what triggers these letters? These notice letters often result from human error and simple mistakes during payroll setup. There are numerous ways to trigger a tax notice, such as transposing a digit when entering a FEIN (federal employer identification number) or accidentally using an incorrect federal tax deposit schedule. We outline a few of the most common IRS and state tax agency notices employers can receive below.
Most common notice types
Notice of Delinquent Tax Liability
The IRS or state tax agency sends this notice when it believes a business has failed to pay payroll taxes on time or in full. The notice will typically include the amount owed alongside penalties and interest.
Notice of Intent to Levy
The IRS sends this notice when a business has not responded to previous notices and has not paid its delinquent payroll taxes. The notice will inform the business that the IRS intends to seize its assets to satisfy the tax debt.
Notice of Proposed Assessment
The IRS or state tax agency sends this notice when it believes a business has underreported or underpaid payroll taxes. The notice will include the proposed amount owed, alongside penalties and interest.
Notice of Penalties Assessed
The IRS or state tax agency sends this notice when a business has failed to comply with payroll tax requirements, such as filing payroll tax returns or making timely deposits. The notice will include the penalties assessed, ranging from a percentage of the amount owed to a flat fee per occurrence.
Our employer received a tax notice. Now, what do we do?
We take painstaking steps to ensure payroll products launched leveraging our infrastructure are compliant and accurate in all jurisdictions. Still, sometimes errors happen that are out of our control. However, our years of industry experience working with all federal and state tax agencies allow us to find resolutions fast. We do the hard work, so you don't have to!
If your employers receive one of these notices, there's only one thing you need to do: contact Salsa support right away and send a copy of the letter. We'll diagnose the issue by researching your customer's account and contacting the federal or state tax agency on their behalf immediately if necessary. Often we can quickly find the source of the error, correct it and resolve the issue without any penalties. But failure to respond to and resolve these notices promptly can result in additional penalties and interest, and we're sure there's one thing your employers don't need: more tax payments. As always, we're here to help you. If you have any questions about tax resolutions, don't hesitate to get in touch with us today.
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