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The IRS also makes mistakes…

    Published September 13, 2023 – Bureaucratic errors can—and they do happen.

    Among the forms that some businesses need to submit to the IRS is the Form 8955-SSA. This form provides information about separated employees who still have retirement benefits with the company.

    Now, what happens when you’ve filed this form on time but receive a penalty notice from the IRS labeled CP 283-C? Don’t panic. It could be a mistake, and there are ways to address it.

    What is a CP 283-C Notice?

    A CP 283-C notice is a penalty letter from the IRS stating that you haven’t complied with tax reporting regulations, specifically concerning Form 8955-SSA. The notice usually includes a penalty amount and instructions for payment. But what if you know you’ve submitted the form on time? Receiving such a notice can be confusing and stressful, especially if you have diligently complied with IRS deadlines.

    Possible Reasons for the Mistake

    Mistakes can happen for various reasons: system errors at the IRS, incomplete data transmission, or issues with the form processing software you used. Daily, the IRS processes vast amounts of information and, like any large organization, is susceptible to errors.

    Steps to Take If You Receive a Mistaken Notice

    1. Review Your Records: This may sound basic, but double-check to confirm you’ve actually submitted Form 8955-SSA on time. Go through your filing records, electronic confirmations, or certified mail receipts.
    2. Contact the IRS: The CP 283-C notice should include contact details. Reach out to clarify the situation. Be prepared to provide evidence that you submitted the form on time.
    3. Consult a Tax Advisor: Even though you may be sure that you’ve done everything correctly, consulting a tax professional can offer a second pair of eyes and help you effectively present your case to the IRS.
    4. Submit Written Proof: After the initial verbal communication, submitting a written response with attached evidence like delivery receipts or electronic confirmation is advisable, showcasing your timely filing.
    5. Follow-Up: Make sure to track your correspondence and follow up until you receive confirmation from the IRS that the mistake has been corrected and that no penalty is due.
    6. Stay Updated and Informed: While it’s crucial to address any IRS notices promptly, it’s also essential to stay updated on any announcements or changes that the IRS may make. Subscribe to IRS updates or consult your tax advisor regularly to be aware of any systemic issues or programming glitches.

    Running your business is challenging enough without worrying about incorrect tax penalty notices. The key is not to panic but to approach the situation methodically. Check your records, engage in clear communication with the IRS, seek professional advice, and submit written evidence to rectify the mistake.

    If you’ve followed these steps, it’s likely that the IRS will acknowledge the error and remove the penalty. By keeping complete records, working with a tax professional, and acting promptly, you can ensure that a minor hiccup doesn’t turn into a significant hurdle for your business.