941 deposit requirement change

[PATAX]

Client received letter for first quarter of 2023 form 941 return where IRS said that they waived the penalty for failure to deposit on a semi weekly schedule. Client has always been a monthly depositor. They claim that the client was previously notified that they were changed from monthly to semi weekly, but client said they never received the letter. Has anyone else had this issue with the IRS? Thanks a lot.

[Jim-from-Ohio · Accepted solution]

One of my clients got a letter exactly like you mentiond.. odd thing though in this case we were already making the 941 deposits by the following wednesday after a friday payroll date.  Offering payroll to a couple of dozen business clients I don't count on my clients getting that letter or if they do, forwarding it to me.  Your post also reminds me to get ready for 2024 now as the look back window is July 1, 2022 to june 30, 2023 to see if any 941 taxes were over $ 50,000 in that period.

[abctax55]

Of all my payroll clients.... only a few get that letter to me.  So @Jim-from-Ohio , I do the same as you & review the prior 12 month requirement when I do the Q2 quarterlies.  

[Jim-from-Ohio]

I just went through all my payroll clients and I will have one additional payroll client that I have to switch to make the deposit after every payroll.  I already have some of those more frequent payors and this will be one more for 2024. 

[PATAX]

@Jim-from-Ohio @abctax55 Thanks a million for the information. I think what might have happened was since the IRS was behind in processing the paper filed 941 returns, then they may have not informed the client that they changed them to a weekly depositor.

[abctax55]

"....since the IRS was behind in processing".

Maybe.... maybe not.   As I said, 99.999999999 % of my payroll clients never provide the letter, or they provide it with their tax return info 7-8 months late.  Usually an unopened envelope <w>.

The waiver for the first late payment is S.O.P. in my experience.