Process and Respond to Tax Notices

Submitted by admin on Tue, 05/04/2021 - 15:24
Policy: 

F/EA processes, records and responds to notices from Federal, State and Local tax agencies that are received on behalf of employers. All notices are date stamped immediately upon receipt. 

Notices that may be received by F/EA on behalf of a participant include notices from State Department of Revenue (DOR), State Department of Labor (DOL) or the Internal Revenue Service notifying the participant of: a missing employer tax return, a missing employer tax payment, an insufficient employer tax payment, a tax payment in excess of tax due, a penalty for a late return or payment, or an incorrectly file tax return.
 
Each notice is researched on behalf of the employer. Often, the tax notice is issued in error.   Documentation supporting that the notice was issued in error must be collected and submitted to the tax agency to resolve the notice. The notice is logged in <<where is data stored>> and the data is used for reporting purposes as applicable.
 
If payments are required to resolve notices, requests for payment are submitted to the Payroll Department.  Payment is submitted to the agency that issued the notice with a copy of the notice. Copies of checks cut as payment to resolve notices are stored with notices. 
 
If payment is required to resolve a penalty assessed as a result of F/EA’s negligence, F/EA pays the penalty on behalf of employer from the F/EA's bank account that is not connected with program funds.
 
All notices and corresponding resolution information are scanned into the file. Scanned documents are stored for a minimum of 7 years per File Retention Policy.
Procedure: 

 

  1. Immediately upon receipt, tax notice is date stamped with the date the notice is received by F/EA
  2. Notices are delivered to <<Staff Title>>
  3.  <<Staff Title>> reviews notices within 1 business day and prioritizes notices with the nearest due date
  4. Within 5 days of receipt, <<Staff Title>> processes all received notices
  5. <<Staff Title>> finds participant no. for employer listed on notice
    1. <<Staff Title>> logs into Payroll System
  1. <<Staff Title>> obtains last check date for participant
  2. Write the last Payroll Check Date on the front of notice
  3. Run the report for the period listed on the notice
  4. Research if participant is no longer in the program
  5. <<Insert process to do this>>
  6. Search Customer Service and Payroll System to identify if notice was already processed and if a payment submitted (if applicable).
  7. Go to the <<File Path>>
  8. Open respective folder for notices (IRS, DOL, DOR)
  9. Open spreadsheet containing this notices
  10. Search for participant and notice and see if it was already processed.
  11. If already processed, confirm with respective agency to make sure the notice was sent in error, and/or disregard notice.
  12. If not processed yet, process notice.
  13. <<Insert process to research and respond to notices of each type>>
  14. Record notice information
  15. Open spreadsheet called <<>>saved at: <<File Path>>
  16. Record the following information from the notice:
  • Date notice received
  • Consumer number
  • Consumer name
  • Issue (on notice)
  • Period Due
  • Check date
  • Check number
  • Resolution
  • Amount of payment (if any)

 22.  Payroll Department issues checks and/or returns to applicable tax agency with copies of notices

 23.  Copies of checks and/or returns are submitted to <<Staff Title>>

 24.  Copies of checks and/or returns are attached to notices

 25.  Notices, checks and/or returns are scanned to participant scan file and saved for a minimum of 7 years per File Retention Policy

 26.  Any notices received for consumers who did not have payroll during the period on the notice:

 27.  Must have zero returns (as applicable per notice) completed by <<Staff Title>> or

 28.  Must have account numbers terminated (See chapter on Retiring and Revoking Account Numbers and Authorization)

 29.  If it is determined that the participant transferred to another F/EA, additional research is required

  • The F/EA to which the participant transferred is contacted as necessary
  • Notices and returns (as applicable) are scanned to participant scan file and saved for a minimum of 7 years per File Retention Policy

 

Internal Controls: 

The internal controls used by F/EA to monitor this process establish responsibility, segregate duties, document procedures and ensure independent internal verification.

  1. All notices are date stamped immediately upon receipt.
  2. <<Staff Title>> reviews notices within a single business day and prioritizes those with the nearest due dates.
  3. Each notice is researched individually.
  4. All notice information is recorded in a spreadsheet for reporting and documentation purposes.
  5. All notices and corresponding resolution documents (payments, returns, applicable research) are scanned to the participant’s scan file and stored for a minimum of 7 years.