CP2100 and CP2100A notices - Payments subject to backup withholding

When businesses and other payers file information returns with data that doesn't match IRS records, IRS sends a CP2100 or CP2100A notice to them. The notices tell payers that their information returns have a missing or incorrect Taxpayer Identification Number (TIN), name or both. 

Each notice has a list of payees with the issues. Payers need to compare the listing with their records and correct or update their records, if necessary. 

Payments subject to backup withholding 

CP2100 and CP2100A notices also tell payers that they may be required to backup withhold tax payments. Payments may be subject to backup withholding if: 

• The payee doesn’t: 
• give their TIN to the payer in the required manner 
• certify that they aren't subject to backup withholding for underreporting interest and dividends 
• The IRS tells the payer 
• the payee gave an incorrect TIN and didn’t certify their TIN as required 
• they must begin backup withholding because the payee didn't report all their interest and dividends on their tax return 

Payers are responsible for any amount they fail to backup withhold and the penalties that may apply.

More information: 

Publication 1281, Backup Withholding on Missing and Incorrect Name/TINs (PDF)

State News: Connecticut MeF Acknowledgement Delay

Please review the below information from the Connecticut Department of Revenue Services.

Connecticut is seeing significant delays in our MeF acknowledgments going out.  We are working to resolve the issue with the slow response time.  

Tax Tip 2024-35: Debunking common myths about federal tax refunds

 Debunking common myths about federal tax refunds

Once people complete and file their tax return, many of them eagerly await any refund they may be owed. Knowing fact from fiction can help manage expectations as they wait for their money.

Myth: Calling the IRS, a tax software provider or a tax professional will provide a more accurate refund date.

Fact: The best way to check the status of a refund is through the Where's My Refund? tool or the IRS2Go app.

Taxpayers can also call the automated refund hotline at 800-829-1954 to get their refund status. This hotline has the same information about current tax year refunds as Where's My Refund? There is no need to call the IRS unless Where's My Refund? says to do so.

Myth: The Where's My Refund? tool must be wrong if it hasn’t updated yet.

Fact: Where’s My Refund has the most current information about refund status. It is updated once a day, usually overnight. Even though the IRS issues most refunds within 21 days, it's possible a refund may take longer. If the IRS needs more information to process a tax return, the agency will contact the taxpayer by mail. Taxpayers should also consider the time it takes for banks to post the refund to the taxpayer's account. People waiting for a refund in the mail should allow extra time.

Myth: The Where's My Refund? tool must be wrong because the refund amount is less than expected.

Fact: There are several factors that could cause a tax refund to be less than expected. The IRS will mail the taxpayer a letter of explanation if it adjusts a refund. Some taxpayers may also receive a letter from the Department of Treasury's Bureau of the Fiscal Service if their refund was reduced to offset certain financial obligations. Before calling, taxpayers should wait for the letter to understand why the change occurred.

Myth: Getting a refund this year means there's no need to adjust withholding for tax year 2024.

Fact: To avoid a surprise next year, taxpayers should make changes now to their tax withholding. The Tax Withholding Estimator tool can help taxpayers determine if their employer is withholding the right amount. Taxpayers can use the results from the Tax Withholding Estimator to complete a new Form W-4, Employee's Withholding Certificate and submit it to their employer as soon as possible. Withholding takes place throughout the year, so it's better to take this step as soon as possible.

REMINDER: The 2023 Filing Deadline is here - Monday, April 15th, Midnight; Support Hours

The 2023 Tax filing season deadline is here:  

Monday, April 15th, Midnight is the filing deadline.  Transmit returns by 10:00 PM EST to ensure timely filing.

Things to Know:

Support Hours 

Reminder, the Refunds Today Support team will be available the following days/hours thru the April 15th Deadline:

• Monday, April 8th:  8am - 7pm ET
• Tuesday, April 9th:  8am - 7pm ET
• Wednesday April 10th:  8am - 7pm ET
• Thursday April 11th:  8am - 7pm ET
• Friday, April 12th:  8am - 7pm ET
• Saturday, April 13th:  10am - 6pm ET
• Sunday, April 14th:  10am - 6pm ET
• Monday April 15th:  8am - Midnight ET

Processing Times

Please remember, the processing volume at the IRS will increase daily as the deadline approaches. Both return volume and return size will affect processing time. While you are accustomed to receiving your Federal acknowledgements within a one hour time-frame, that turnaround time will increase as the deadline approaches. You may see your acknowledgements take from 2 to 4 hours, and possibly longer.

This is why we suggest that you send returns periodically throughout the day. This will help spread out the volume and also help eliminate some of the 'deadline rush' which also impacts IRS processing.

IRS Reject F8936-048

The IRS has determined business rule F8936-048 was rejecting returns erroneously. The business rule has been disabled; therefore, please resubmit any rejected submissions.

IRS Reject F8936-048:

Form 8936, 'PersonalTaxCreditsAmt' in 'CrPreviouslyOwnedCleanVehGrp' must be equal to the sum of Schedule 3 (Form 1040) 'ForeignTaxCreditAmt' and 'CreditForChildAndDepdCareAmt' and 'EducationCreditAmt' and 'RtrSavingsContributionsCrAmt' and 'EgyEffcntHmImprvCrAmt' and 'CreditForElderlyOrDisabledAmt' and 'TotRptgYrTxIncreaseDecreaseAmt'

Client Accounting Suite/Premier (CAS/P) version 23.3 is available

The 23.3 version of CAS/P is now available from the Solution Center or via the auto-update feature in CAS/P. It includes the following regulatory updates.

Regulatory Updates

The following regulatory information is now available for Client Accounting Suite and Client Accounting Suite Premier:

• 2024 Federal Forms update
• 2024 941 is included.
• 943x and 944x are available in Blank Forms.

• 2024 State Returns - Form updates for the following states are included in this update.
• Alaska
• North Carolina
• Rhode Island
• 2024 State Withholding Rates - The following state withholding calculations have been updated for 2024:

• Maryland Counties
• Note:  As other states change their rates for 204, we will provide updates on the support website.

Software Updates

• Export for the 2024 941 to Payroll Compliance Reporting has been enabled.

IRS Reject F7004-905-03 for Form 7004-Business Extension

Customers submitting an extension for business returns may encounter the following rejection code from IRS.

“F7004-905-03 In Form 7004, Line 1, 'ExtensionReturnCd' the return for which the extension is filed must match the return type established with the IRS for the EIN.
/efile:Return/efile:ReturnData/efile:IRS7004/efile:ExtensionReturnCd”

The Form 7004 form code for the return associated with this application must match the IRS database.  If necessary, the type of return the extension is to be filed for can be updated on Form 7004 line 1 to match the code the IRS has on file.

The form code can be found on the EIN letter the client received form the IRS.  The customer  can also Contact the Internal Revenue Service at 1-866-255-0654 for additional information on the correct form code.