Payroll Tax Question 941 vs 944

[sea-tax]

I have just got a new client who was notified by IRS in Feb 2006 that they were changed to annual filer form 944. Problem is client does not want this and would like to file quarterly. Also his last accountant filed 1st quarter 941 and I unknowingly followed suit and filed 2nd quarter form 941. My question is how do I undo the requirement of annual form 944 and continue to file form 941?

Do you think it can be solved by merely writing a letter to IRS requesting that the client continue quarterly filing?

Thanks for all your help!

[geekgirldany]

Me too.

I need to find out about this myself. Customer waited until the last minute to bring his payroll. He picked up the forms and left a letter from the IRS with me. I read it later and it said the same thing. That the IRS has discarded the 941 form for 1st qtr since he is required to file a annual 944. To still make payments regularly but don't file Form 941.

Well I did the same thing and filed another 941 for 2nd Qtr. I thought the letter he received at the beginning of the year said it was optional. He could either do quarterly or annual.

[Black Bart]

You're okay, kids.

I've already been through that. My small-biz guy (941er) didn't want to change either and I certainly don't since it undercuts the importance (not to mention money) of my role in this affair. So anyway, he brought the letter to me; I called the service center, the rep told me to make a formal written request on his behalf and it would be granted. I did and they wrote back, said okay--file 941s, and we're all living happily everafter.

[sea-tax]

"Your'e ok Kids" well I guess I am a kid compared to all of you youthfully challenged. HAHA

All kidding aside thanks BB I will try that. Despite all those things the others say on this board about you I think you are alright in my book. Your southern humor makes me laugh at least once a week. Thanks again : )

[veritas]

We talked to them about this. Even though our client will be paying well over the 2500 limit this year they don't care. Must use form 944 and don't file 941. It's all about simplification. Ha Ha ha.

But wait off shore banking, tax evasion for billionaires no problemo!

[jimmcg]

I agree with Black Bart, a formal written request worked for me also. Probably the difference between submitting a formal written request and just talking. All I can tell you is it worked for me also. My request was submitted to the Cincinnati district office.

[Jesse]

Written request

We received a letter back stating that

"we can use 941 for the remainder of 2006. If eligible to file form 944 for 2007, will receive a notice in February of 2007. At that time, if want to opt out of filing Form 944 annually, and file quarterly Forms 941 electronically instead, may do so. However, must contact them at the phone number on the notice. If do not, and continue to file Form 941, our return will not be processed."

[Black Bart]

Veritas - IRS Letter

Hey buddy,

Although it may be too late on that particular client (might get penalties for the first two quarters if he had payroll and you switch now), you might give the "letter" method a shot the next time the issue comes up. I think it might work because:

(1) The reply I got looked pretty much like a "form" letter which tends to indicate it's standard procedure.

(2) Jimm sent his to Cincinatti and I sent mine to Ogden, so two different IRS service centers are allowing it.

(3) The rep I talked to did not instruct me to send it to any particular address or "STOP" desk and just said send it to the general service center address. So she didn't get it and was expecting another agent to receive and approve it, which they did.

(4) As you know, some IRS phone reps occasionally "wing it," making up answers as they go. You could probably have called back a few minutes later (or even now), gotten a different rep and a 180 degree opposite answer.

Jess' letter said his client has to reapply next year and mine didn't mention that, so I guess I'll just wait and see if mine gets a letter about that next year and go from there.

Good luck.

Best regards, BB

[John of PA]

form 944

Another issue here is: will our after the fact payroll software even do the form 944. I got one of those letters for myself. All I use is part-time college students and I am under the 2500. Becasue this is so up in the air, I am filing the 941's anyway , then I will also send in a 944 in Jan., which should be easy to prepare with four 941's in front of me; but hopefull my software (Accountants World After the Fact Payroll) will do the 944. This sounds like something where we will get further guidenace from IRS as the year progresses becasue right now, IRS probably is not sure how strict they want to be on not allowing 941's..

[sea-tax]

Well I took all of your fine persons advice and mailed in a letter , I guess I will cross the old fingers and hope I get a reasonable person on the other end.

John of PA I too wondered about that and I think I might need to call my provider. Of all the payroll check writing and bookkeeping clients I have this was the first, I have seen get the letter. Maybe others got it but didn't tell me. Anyhow I guess we will just have to see how it all turns out.

[Black Bart]

John,

[QUOTE=John of PA] I am filing the 941's anyway , then I will also send in a 944 in Jan. [QUOTE]

I'll make you a bet that sometime around March of '07 you'll get a bill from IRS for either the 944 or the total of all your 941s. It's an even chance that they'll process all the paper and since they only have payments for half the total, you might get billed for the other "unpaid" half.

Yes, I know that's goofy, but I still wouldn't be surprised.

[sea-tax]

BB I agree with you on that one , either file 941's or 944 but don't do both . I can just see the nightmare now. IRS writes and says hey we need you to now file 941c's or 944c's. What a mess, was it that hard to just let people file form 941 quarterly. We are talking about a form that needs to be completed 4 times a year and takes all of 20 minutes to complete.

[Black Bart]

Good luck, sea-tax

Well I took all of your fine persons advice and mailed in a letter , I guess I will cross the old fingers and hope I get a reasonable person on the other end.

I'm pretty sure the letter will work for you. And thanks for the kind words.

[John of PA]

Perhaps a delayed 944

BB I agree with you on that one , either file 941's or 944 but don't do both . I can just see the nightmare now. IRS writes and says hey we need you to now file 941c's or 944c's. What a mess, was it that hard to just let people file form 941 quarterly. We are talking about a form that needs to be completed 4 times a year and takes all of 20 minutes to complete.

Good point BlackBart and Sea-Tax. Perhaps I'll file the 941's. Then in Jan, I'll hold off on sending in the 944 until IRS ask for it. If they don't ask for it, I'll assume they decided to not enforce the 944 filing, at least for 2006. Thanks,
PS: SeaTax, let me guess.....while your working you can look out your window and see the ocean. Not bad!!

[JG EA]

Continuing letters.

A couple of my clients kept getting "File 944" letters after we kept sending in the 941's. So, I thought it may be a good idea to read the first letter that came. I also called the number in the second letter.

So, the deal is - if they've been picked for 944 (whether it fits or not), go ahead and make all your deposits on times, do not send in the 941's, and file a 944 at the end of the year. They will then send a letter telling you to go back to the 941's if you are over the 944 amount. If we keep sending in the 941's this year after receiving the "File 944" letters they'll keep sending more letters not to do that.

There was an opportunity to opt out, but that date is gone. I would like to see if the letters that you are sending now work also.