DEPOSITING AND REPORTING WITHHELD TAX Chapter 8 8.1 Employer Identification Numbers To ensure all payments are credited to the correct employer, an EIN is assigned The EIN identifies an employer to the IRS and the SSA & is expressed in the following format: XX-XXXXXXX How to get an EIN? Application online able to get and use EIN immediately By Fax-TIN EIN issued within 4 business days By Phone able to get and use EIN immediately Paper form SS-4 4 to 5 weeks for receipt of EIN 8.1 Employer Identification Numbers Responsible Party must be identified beginning in rd party can receive EIN on behalf of employer If EIN not received in time for quarterly/annual filing, write APPLIED FOR in EIN space and date of application Use one EIN if Regardless of the number of businesses the employer is operating or trade names it is using only one Form SS-4 should be filed and one EIN used Exception: Separate but affiliated corporations 8.1 Employer Identification Numbers Mergers, consolidations & reincorporations Proper EIN to use after a corporate merger or acquisition depends on its characterization under the Internal Revenue Code. If a reorganization, use the previously assigned EIN A new EIN is required if a new company merges as a result of the reorganization if it does not qualify as a reorganization by IRS rules 8.2 Depositing Withheld Income & Employment Taxes Taxes are not necessarily paid when filing a return Must deposit the taxes per the IRS assigned frequency Payroll Tax Deposit Rules Based on the lookback period Example 1: For calendar year 2011, the lookback period is July 1, 2009 to June 30, 2010 Example 2: For calendar year 2012, the lookback period is July 1, 2010 to June 30, 2011 Monthly If total tax liability for the lookback period equals $50,000 or less Semiweekly If total tax liability for the lookback period exceeds $50,000 2011 Lookback Period 2012 Lookback Period 3rd qtr $12,000 4th qtr $12,000 1st qtr $12,000 2nd qtr $12,000 $48,000 Total employment tax liability $48,000 < $50,000 = Monthly Depositor 3rd qtr $13,000 4th qtr $13,000 1st qtr $13,000 2nd qtr $13,000 $52,000 Total employment tax liability $52,000 > $50,000 = Semi-Weekly Depositor 8.2 Depositing Withheld Income & Employment Taxes Nonpayroll withholding treated separately Employers must also withhold federal income from nonpayroll payments it makes, including: Reportable payments subject to backup withholding Gambling winnings Retirement pay for service in the Armed Forces Pension, annuities, IRAs & other deferred income Reportable on Form 945, Annual Return of Withheld Federal Income Tax Lookback period 2nd calendar year preceding the current calendar year Very small employers with annual tax liability of $1,000. or less would file a Form 944 and pay liability annually 8.2 Depositing Withheld Income & Employment Taxes New Employers Classified as monthly depositors because they have no tax liability experience during the lookback period OR until they accumulate more than $50,000. in tax liability during a lookback period OR trigger the one-day rule Lookback period begins on first day of operations and ends on the next June 30. Successor Employers Successor company with the same EIN as predecessor company has the same deposit frequency as the predecessor. Successor company with new EIN is considered a monthly depositor. 8.2 Depositing Withheld Income & Employment Taxes IRS only sends depositor status notices to employers with a change in their deposit schedule for the upcoming tax year Railroad & Farm employers File annual employment tax returns rather than quarterly Lookback period is the second calendar year preceding the current calendar year Agricultural employers may have both farm and nonfarm employees Will file both Form 943 and Form 941 Separate determinations for depositor status 8.2 Depositing Withheld Income & Employment Taxes Must be paid by The 15 th of the following month Monthly Deposit Requirements Accumulated tax liability for the calendar month 8.2 Depositing Withheld Income & Employment Taxes Must be paid by The following Wednesday Semiweekly Deposit Requirements Wages paid on Wednesday, Thursday & Friday Must be paid by The following Friday Semiweekly Deposit Requirements Wages paid on Saturday, Sunday, Monday & Tuesday 8.2 Depositing Withheld Income & Employment Taxes Must be paid by The close of the next business day One-day deposit rule Accumulated tax liability reaches $100,000 on any day during a deposit period 8.2 Depositing Withheld Income & Employment Taxes One day Deposit Rule If accumulated employment tax liability reaches $100,000 on any day during a monthly or semiweekly deposit period, the taxes must be deposited by the close of the next business day Monthly depositors then become a semiweekly depositor for the remainder of the current calendar year and the entire next calendar year. 8.2 Depositing Withheld Income & Employment Taxes Quarterly de minimis deposit rule Accumulated tax liability of less than $2,500 for any quarter can be deposited according to the employers depositor status or pay with their Form 941 Effective in 2010, this safe harbor also applies if the tax liability was less than $2,500 for the immediately preceding quarter. 8.2 Depositing Withheld Income & Employment Taxes Form 944 Annual employment tax liability reporting for small employers Employment tax liability of $1,000 or less qualifies small employers for this annual filing. Employers are notified by the IRS of their qualification for the Employers Annual Federal Tax Program (EAFTP) Tax liability is paid with a timely filed Form 944 Not held to the monthly or semiweekly depositor statuses If liability of $1,000 is exceeded, employer is no longer qualified; however, will still file Form 944 for that calendar year & Form 941 for the succeeding years 8.2 Depositing Withheld Income & Employment Taxes Saturday, Sunday and holiday extension If the due date of the deposit falls on a non-banking day, the deposit is due on the very next banking day Effective 1/1/11, state holidays no longer qualify Semiweekly depositors are guaranteed at least 3 banking days after the last day of the semiweekly period to make their deposit *If any of the 3 days is not a banking day, the employer has an additional day to deposit 8.2 Depositing Withheld Income & Employment Taxes Shortfall rule IRS allows a safe harbor shortfall so employers are not penalized for depositing a small amount less than the entire amount of the deposit obligation and not be penalized Obligation is satisfied if the shortfall is no more than the greater of $100 or 2% of the entire amount due All deposits must be made timely & shortfall is deposited by the appropriate make-up date. Monthly depositors shortfall must be deposited by the 941 due date Semiweekly depositors shortfall must be deposited by the 1st Wednesday or Friday occurring on or after the 15th of the month after the month during which the original deposit was due 8.2 Depositing Withheld Income & Employment Taxes Timeliness of deposits Generally, deposits are considered timely by the IRS if received via EFTPS and the amount is withdrawn from the employers account on or before the due date 8.2 Depositing Withheld Income & Employment Taxes How to Deposit Payroll Taxes Electronic Deposits have now replaced FTD coupons A provision of the North American Free Trade Implementation Act (NAFTA) amended the IRC & requires the implementation of an Electronic Federal Tax Payment System (EFTPS) for the collection of federal depository taxes. Exception: Does not apply to employers with total employment liability of less than $2,500. Payment is made with Form 941 or 944. 8.2 Depositing Withheld Income & Employment Taxes EFTPS requirements Organizations that deposit more than $200,000 in total federal tax deposits in any year must use EFTPS to make all their federal deposits beginning with the first return period in the second succeeding calendar year. Once an employer is required to file electronically, it cannot go back to using paper coupons. 8.2 Depositing Withheld Income & Employment Taxes Electronic Federal Tax Payment System Employers that are required to deposit electronically must use EFTPS Enrollment: New business taxpayers are pre-enrolled Newly required taxpayers enroll with Form 9779, Business Enrollment form for EFTPS or online atEnrollment verifies company info & notifies the IRS of the deposit method selected EFTPS-Direct (ACH Debit) EFTPS-Through a Financial Institution (ACH Credit) 8.2 Depositing Withheld Income & Employment Taxes Paper Deposits Employers who are not required to use EFTPS may use federal tax deposit coupons and pay check, cash or money order. Along, with the deposit the employer must provide the bank with a completed Form 8109, Federal Tax Deposit Coupon Nonpayroll withheld taxes and FUTA payments are made the same way if there is no EFT requirement. 8.2 Depositing Withheld Income & Employment Taxes Penalties for Failure to Deposit on Time 2% x undeposited amount for 1-5 days 5% x undeposited amount for 6-15 days 10% x undeposited amount for > 15 days 15% x undeposited amount if not paid within 10 days after the ER receives its first IRS delinquency notice Special Rule for electronic depositors: An employer required to deposit electronically, that uses a paper coupon & check is subject to the 10% failure-to- deposit penalty because it failed for more than 15 days to make the deposit in the correct manner, even though the paper deposit was made timely 8.2 Depositing Withheld Income & Employment Taxes Employer Relief IRS allows for instances to waive penalties for late deposits: IRS may waive the failure-to-deposit penalty for an employers inadvertent failure to make a deposit with certain criteria IRS may also waive the failure-to-deposit penalty if the employer can show reasonable cause Deposit changes were mandated by the IRS Restructuring & Reform Act of 1998 Require IRS to apply deposits to the most recent period within the tax period to which the deposit relates Shortfall rules: The payment is treated as a liability for a deposit period IMMEDIATELY BEFORE the shortfall make-up date and after the end of any other deposit period ending before the shortfall make-up date 8.2 Depositing Withheld Income & Employment Taxes Redesignating estimated tax payments as employment tax deposits If employer determines its corporate income tax liability for the current tax year will be less than the amount of estimated income tax payments already made, the employer can redesignate some of the estimated income tax it has paid as employment tax deposits 8.2 Depositing Withheld Income & Employment Taxes Employer can avoid an averaged failure-to-deposit penalty by: Monthly payer verify monthly liability section of Form 941 is completed properly Semiweekly payer verify the Schedule B is properly completed (tax LIABILITY dates are to be used instead of tax PAYMENT dates) If employer is a semiweekly payer per IRS rules and does not complete a Schedule B, the penalty is computed by taking the total adjusted tax liability and distributing it equally throughout the period 8.2 Depositing Withheld Income & Employment Taxes IRS can and WILL apply a 100% penalty for not withholding and paying taxes Known as the Trust Fund Recovery Penalty or the 100% Penalty Responsible person must have acted willfully in not withholding and paying over withheld income and employment taxes Notice must be given at least 60 days before IRS can issue a notice & demand for payment of penalty The liability for the penalty can be shared PEOs can face trust fund penalties as well 8.2 Depositing Withheld Income & Employment Taxes Criminal Penalties can also be assessed If found guilty, the person(s) are guilty of a felony and can be fined up to $10,000. and/or imprisoned for up to 5 years Penalty and interest notices must be detailed Include name of penalty IRC section under which it is imposed Computation of the penalty If interest is imposed, must include IRC section and calcuation of the interest 8.2 Depositing Withheld Income & Employment Taxes 8.3 Form 941 Quarterly return which generally must be filed by all employers that withhold federal income tax from employee compensation 8.3 Form 941 Who Must File Form 941 Employers exempt from filing Form 941 Seasonal employers that do not pay wages regularly Businesses that withhold federal income tax from only nonpayroll items Employers that report only withheld taxes on domestic workers Employers that report only wages for employees in US territories Agricultural employers Employers that have an annual employment tax liability of no more that $1,000 & file Form 944 8.3 Form 941 Who Must File Form 941 Business Reorganizations If an employer sells or transfers its business, a separate Form 941 must be filed by both the previous and current owners Each must only report the wages it paid and taxes it withheld Statutory merger or consolidation of two businesses Surviving corporation must file Form 941 for the quarter during which the change took place, reporting for both companies The reporting results in discrepancies between the amounts shown on the surviving corporations Forms W-2 and 941 for the year of the merger or consolidation Surviving corporation should file Schedule D (Form 941) Report of Discrepancies Caused by Acquisitions, Statutory Mergers, or Consolidations after Forms W-2 are filed 8.3 Form 941 Completing the Form Form 941 is scannable Created so that it can be scanned by IRS Scanning requires conformity Substitutes that follow the format will be acceptable Forms should not be submitted to the IRS for specific approval Software developers and form producers send in a PDF format to assist the IRS in preparing to scan the forms 8.3 Form 941 Completing the Form Completing Form 941 12-point Courier font Omit dollar signs Enter dollars to the left of the pre-printed decimal points & cents to the right Use of commas is optional Leave blank any data field with a value of zero Enter negative amounts using a minus sign, if possible, otherwise use parentheses Enter the employers name & EIN on all pages & attachments Staple multiple sheets in the upper left corner for filing 8.3 Form 941 Completing the Form Form must have employers signature Owner, if sole prop Principal corporate officer, if corporation or LLC (treated as a corp) Authorized member or partner of an unincorporated association or partnership (including LLC treated as a partnership) Owner of a single member LLC A fiduciary if the employer is a trust or estate 8.3 Form 941 Completing the Form Forms signed by agents Agent obtains authorization from the IRS by having the employer designate the agent on Form 2678, Employer / Payer Appointment of Agent Attorney, accountant, other representative or employee must obtain a proper power of attorney by completing Form 2848, Power of Attorney and Declaration of Representative 8.3 Form 941 Completing the Form Third party can discuss form with IRS Employer must check the Yes box in Part 4 of Form 941 and Enter the name, phone number, & 5-digit personal identification number of the third party This authorizes the designee to: Provide the IRS with any missing information from the Form 941 Call the IRS for any information about processing Respond to the IRS concerning IRS notices that the employer has shared with the designee about math errors on the form and return preparation 8.3 Form 941 Completing the Form Does not authorize the designee to receive a refund check Bind the employer to anything or otherwise represent the employer Designation expires one year from the due date of the Form 941 Can be revoked beforehand by either the employer or designee 8.3 Form 941 Completing the Form Alternative signature methods 1998 IRS Restructuring and Reform Act Electronic signatures 2005 Facsimile signatures allowed This procedure is primarily a convenience for payroll service providers New Employers Yet to be assigned an EIN should type the words Applied For and the date of the application in the EIN space provided on the form 8.3 Form 941 Completing the Form Employers going out of business Check the box on Line 18 when completing its last Form 941 & enter the last date on which wages will be paid Attach a statement showing the address where the employers records will be kept, name of the person keeping the records, & if business was sold, the name & address of the new owner 8.3 Form 941 Completing the Form Claiming the COBRA credit on Form 941 American Recovery and Reinvestment Act of 2009 Refundable payroll tax credit Taxes to offset: Employee federal income tax withholding Employee share of social security & Medicare taxes Employer share of social security & Medicare taxes If the COBRA credit taken exceeds the amount of the employers payroll tax liabilities, the employer is entitled to a tax refund from the US Treasury or a credit to the next quarter 8.3 Form 941 Completing the Form Form 941 was amended in 2009 by adding Lines 12a and 12b. 12a = amount of the credit being claimed 12b = number of eligible individuals who paid the discounted COBRA premium Employers can claim the credit as soon as the eligible individual pays the 35% discounted premium IRS will apply the full amount of the COBRA credit reported on Line 12a & treat it as deposited on the 1 st day of the quarter; each deposit thereafter will be treated as timely up to the amount of the credit 8.3 Form 941 Completing the Form Lookback period is unaffected Computed from Line 8 of Form 941 Total Taxes After Adjustments before taking into account any credits. Next Day deposit rule applies to employment tax liability prior to applying the credit to the payment COBRA credit does not have to be taken in the quarter in which it was paid, can be taken in a later quarter in the same calendar year or on Form 941-X for the quarter in which the subsidy was provided 8.3 Form 941 Completing the Form COBRA credit does not affect Schedule B reporting Schedule B (Form 941) is used to report an employers tax liability for each time it makes payments subject to employment taxes, not the amount of the tax deposits For Monthly depositors, the monthly tax liability totals reported in Part 2 of Form 941 is unaffected Employers must maintain supporting documentation related to the discounted subsidy claim; currently IRS does not require reporting of these items other than the offset amount (list on page 8-34) 8.3 Form 941 Completing the Form COBRA credit does not affect Schedule B reporting Schedule B (Form 941) is used to report an employers tax liability for each time it makes payments subject to employment taxes, not the amount of the tax deposits For Monthly depositors, the monthly tax liability totals reported in Part 2 of Form 941 is unaffected Employers must maintain supporting documentation related to the discounted subsidy claim; currently IRS does not require reporting of these items other than the offset amount (list on page 8-31 & 8-32) 8.3 Form 941 Completing the Form Payments made with Form 941 For employers that qualify with employment tax liability of less than $2,500 in the current or preceding quarter Include Form 941-V, Form 941 Payment Voucher with the employers Form 941 and include the following: EIN or Applied For if unassigned Darken the oval for the quarter Employers name & address Amount paid These employers cannot take advantage of the 10-day extension granted to employers that have deposited their entire tax liability on time throughout the quarter Payment can be made via phone or internet using a credit card. If filing Form 941 via e-file, you can e-pay balance due using a tax preparation software or through a tax professional. This payment is known as EFW Electronic Funds Withdrawl. And, of course, you can ALWAYS pay using EFTPS! 8.3 Form 941 Completing the Form 8.3 Form 941 When & Where to File Form 941 FORM 941 FILING DEADLINES QUARTERQUARTER ENDS 941 DUE DATEAUTOMATIC EXTENSION JAN MARMARCH 31APRIL 30MAY 10 APR JUNEJUNE 30JULY 31AUGUST 10 JULY SEPTSEPTEMBER 30OCTOBER 31NOVEMBER 10 OCT DECDECEMBER 31JANUARY 31FEBRUARY 10 If the Form 941 due date falls on a Saturday, Sunday or legal FEDERAL holiday, the due date becomes the next business day. 8.3 Form 941 Completing the Form Mailed Forms 941 Considered filed on the date of the postmark on the envelope by the USPS and can be timely filed even if received after the due date Post Mark Rule applicable for IRS designated PDS (Private Delivery Service) Important to retain certified mail receipts to serve as proof of timely filing Proof of mailing vs proof of delivery Certified or registered mail are the only way to prove mailing & support the presumption that a document has been delivered even if the IRS shows no record of receipt IRS provides addresses for mailing paper Form 941 in the Form 941 instructions 8.3 Form 941 Completing the Form Form 941 Line by Line Instructions (see pgs 8-35 through 8-38 in the Payroll Source) 8.3 Form 941 Completing the Form 8.3 Schedule B (Form 941) Filed with the quarterly Form 941 for Semiweekly depositors. Records tax liability & not deposits made. 8.3 Schedule B (Form 941) Filed by: Semiweekly depositors Monthly depositors that accumulate at least $100,000 in employment tax liability during a month Records an employers payroll tax liability on the date payments were made subject to payroll taxes Not deposits made Not recorded on date paid IRS uses it to determine if the employer has deposited its federal employment tax liabilities on time 8.3 Schedule B (Form 941) Amending a previously filed Schedule B Semiweekly depositor: If an employer has been assessed a failure-to-deposit penalty for a quarter & made an error on Schedule B that will not change the total liability for the quarter that was reported on Schedule B may be able to reduce the penalty by filing a corrected Schedule B Monthly depositor: Employers can also file a Schedule B if they have been assessed a failure-to-deposit penalty for a quarter & made an error on the monthly tax liability section of Form 941. Only the correct monthly totals should be entered, daily entries are not required File Amended Schedule B with the Form 941-X for a tax decrease or a tax increase ONLY. Allocation Schedule for Aggregate Form 941 Filers Form released in 2010 Filer has to be approved by the IRS as an agent to file this form 8.3 Schedule R (Form 941) IRS has offered employers advice to help them avoid the most common errors made when completing Form 941. At the bottom of Page 8-44 in your book is the list adapted for the 2011 Form IRS Advise on Avoiding Form 941 Errors 8.4 Annual Reporting of Nonpayroll Withholding Form 945 Report amounts withheld throughout the year for items such as pension, annuities, gambling winnings & backup withholding. 8.3 Form 945 IRS developed Form 945, Annual Return of Withheld Federal Income Tax and removed all nonpayroll items from Form 941 This was done to reduce the complexity of Form 941 & ease the reconciliation among Forms 941, W-2 & W-3 Form 945, businesses report amounts withheld throughout the year from nonpayroll items Also report total deposits of these nonpayroll withheld taxes & any amount withheld but not yet deposited for the form is completed 8.3 Form 945 A monthly summary of tax liability is reported on Form 945 Lines A-L with the total being entered on Line M Completed by monthly depositors with at least $2,500 Semiweekly depositors complete Form 945-A, Annual Record of Federal Tax Liability Also monthly depositors that accumulate at least $100,000 in nonpayroll withheld tax Third party can be designated 8.3 Form 945 When & where to file Form 945? Due on January 31 st of the following year Extension to February 10 th if all deposits are made timely throughout the year Mailing address is provided in the Form 945 instructions 8.3 Form 941-M Monthly reporting for Delinquent Employers IRS notifies the employer that they must file & report employment taxes on a monthly basis rather than quarterly Employers that fail to withhold or deposit on time Form 2481, Notice to Make Special Deposits of Taxes sent from the IRS to the employer and is effective immediately Additionally, delinquent employers must make all deposits within 2 banking days after the payment of wages 8.3 Form 941-PR & 941-SS Form 941-PR is filed by employers with employees in: Puerto Rico Form 941-SS is filed by employers with employees in: American Samoa Guam Northern Mariana Islands Virgin Islands Each of these forms is used to report an employers liability for social security & Medicare taxes, but not federal income tax withholding Form 941 must also be filed to report federal income tax withholding 8.3 Domestic Employees Individuals hiring domestic employees must report & pay both employer & employee share of social security & Medicare taxes on wages it pays these employees on their personal tax return, Form 1040, on Schedule H Threshold requirement is $1,700 per year for 2011 Employer must withhold, report & pay federal income tax if the employee requests it. Household employers are required to make payments of withheld taxes throughout the year. Sole prop who file Form 941 for business employees may report the household employee wages on Form 941 as well if the $1,700 threshold is met 8.3 Form 943 Annual Reporting by Agricultural Employers Employers of farmworkers Must withhold federal income tax & withhold and pay social security & Medicare taxes on farmworker wages Annually report the wages paid & taxes withheld on Form 943 A monthly summary of tax liability is reported on Form 943 Lines A-L with the total being entered on Line M Completed by monthly depositors Semiweekly depositors complete Form 943-A, Agricultural Employers Record of Federal Tax Liability Also monthly depositors that accumulate at least $100,000 in payroll tax liability When & where to file? Due date is January 31 of the following year 8.5 Form 944 Annual Reporting by Small Employers Annual reporting of employment taxes for employers with small tax liability, $1,000 or less. 8.5 Form 944 Annual Reporting by Small Employers 2006 Employers Annual Federal Tax Program (Form 944) (EAFTP) was developed by the IRS Benefited small employers by reducing the filing burden 2008 Employers were notified by the IRS if they were eligible for the program Required to file Form 944 until they were no longer eligible 2009 IRS changed the rules to make EAFTP voluntary Annual employment liability of $1,000 or less qualifies employers for eligibility 8.5 Form 944 Annual Reporting by Small Employers In 2010, employers who wish to opt out or opt into the program, must do so by calling or writing the IRS & get written confirmation that their filing requirement has been changed Call by April 1 Postmarked written request by March 15 8.5 Form 944 Annual Reporting by Small Employers Minimal differences between the 944 & the 941 No question regarding the number of employees on the payroll on any specified date If total employment tax for the year is $2,500 or more, each months liability must be indicated in Part 2 There is no check box for seasonal employers 8.5 Form 944 Annual Reporting by Small Employers When & where to file? Due date is January 31 of the following year Qualifies for 10-day automatic extension if all deposits have been made on time Correcting Form 944 On or after January 1, 2009, corrections should be made on Form 944-X, Adjusted Employers Annual Federal Tax Return or Claim for Refund Prior to January 1, 2009, corrections should be made on Form 941c, Statement to Correct Information 8.6 Making Corrections / Adjustments Form 941-X used to correct the following: Wages, tips & other compensation Income tax withheld from compensation Taxable social security wages Taxable social security tips Taxable Medicare wages and tips Advanced EIC payments made to employees Not used to correct number of employees reported 8.6 Making Corrections / Adjustments Form 941-X due dates are dependent upon when the error was discovered & if taxes are over- or under-reported Underreported taxes discovered in: Q1 due by April 30 Q2 due by July 31 Q3 due by October 31 Q4 due by January 31 The final deadline for filing is 3 years from the date the original Form 941 was filed Overreported taxes final deadline is 3 years from the date the original Form 941 was filed or 2 years from the date you paid the tax reported on Form 941 Can request funds in two different ways: Credit to next quarter liability, or Refund mailed to the employer 8.6 Making Corrections / Adjustments Form 843, Claim for Refund and Request for Abatement Prior to 2009, this form was filed with Form 941c to request a refund of overpaid taxes In 2009 & beyond, Form 941-X replaces both forms However, Form 843 should still be used to request a refund or abatement of assessed interest or penalties 8.7 Penalties for Late Reporting and Paying Tax Late filing of employment tax returns results in an addition to tax 5% of the tax shown on the return for each month the return is late up to the maximum of 25% (higher % if fraudulent) Failure to pay employment taxes results in an addition to tax Additions to tax, civil penalties & interest are not the only penalties employers face Criminal fines & imprisonment can also be enforced 8.7 Penalties for Late Reporting and Paying Tax 1998 IRS Restructuring and Reform Act, IRS penalty & interest notices have to include details as to how they were determined & also including: Name of the penalty IRC section under which it is imposed Computation of the penalty Questions