How can I inform the IRS of payment adjustments on Schedule B of 941 form?

Question

We have several corporations we run payroll for, and I accidentally paid a semimonthly tax deposit under the wrong federal id number and bank account. The tax has been paid, but applied to the wrong entity. I have made a new payment today for the correct corp and will apply future taxes towards the overpaid corp's liability. I just wondered since I know of the problem now if I can alert the IRS before filing Schedule B, or do I have to wait until they receive the 4th quarter report and post it and then send me a letter saying the tax is paid late, yadda yadda yaddda.... before I can send the explanation.

I couldn't find anything on IRS website that addressed this.

Answer 1

The IRS does not have any way to correct a 941 that has not yet been filed. When you receive your notice that your payment was late, you can provide them with the explanation you have given above and ask them to waive the penalty for reasonable cause. (They have authority to waive penalties, but they cannot waive interest that is due, so you will have to pay interest if it is charged.) I would attach a statement to the 941 when you file it with the whole explanation. They will probable not read it or act on it at the time it is received, but it is something you can point out when you appeal the penalty later.

RamsGod did not read your info completely. You stated that you have already made up the missed payment for the corporation and will use up the overpayment on the other company before quarter -end.

An alternative, if you really want it, is to get power-of-attorney forms (form 2848) signed by an authorized officer of each corporation and submitted to the IRS for these 2 companies for the 941 reports. Then you can call them and get the amount that was applied to the wrong company transferred to the correct company. It's more work, but this way neither company will show up as delinquent.

Answer 2

Andreas is right, I reread the question:)