IRS Notice CP276A

If you received Notice CP276A from the IRS you don't need to respond or amend your return. However, you have to make sure you report your tax liability correctly on future employment returns or the IRS will assess a Federal Tax Deposit penalty (FTD).

Notice CP276A is an IRS warning and it can be generated in multiple scenarios. Here we describe one scenario we are familiar with:

• When you file form 941, in part 2 of the form, you must select an option to identify the type of deposit schedule and tax liability information for that particular quarter.
• If your tax liability on part 1, line 12 is less than $2,500, then you must select the first option on part 2. Our system will automatically force this rule.
• However, when you file your next employment tax form 941, if your tax liability in part 1, line 12 is greater than $2,500 you can select the first option in part 2 only if line 12 of your prior quarter 941 was less than $2,500. Our system can't automatically know this information, so it is your responsibility to make sure you select the correct deposit schedule.
• If you select option 1 in part 2 when your current quarter tax liability is greater than $2,500 AND your prior quarter 941 also showed a tax liability greater than $2,500 with option 1 on part 2 selected, under these circustances, the IRS will issue Notice CP276A to warn you that your tax liability schedule wasn't submitted or completed correctly.

The images below show a sample CP276A, click an image to expand.