IRS Notice 101 states, "We made changes to your Form 940 for the tax period ended [period] - Amount due: [$amount]". The IRS uses Notice CP101 to tell you that they believe there is a mistake on a Form 940, Unemployment tax. This is essentially the same as the various Forms CP10, etc., sent to Individuals. The process is much the same, too, But, businesses carry an extra burden because the IRS can impose enormous penalties which can cripple a business. The information which the IRS used to assert this error is usually not wrong, but lacks proof to offset it. TaxHelpLaw will show you what documents you need to win! But you only have 60 days to respond.
Therefore, it is important to investigate this adjustment. You'll need to review the actual filed return to determine if it is correct. Review the IRS notice carefully for the full explanation of the changes. Check your payments to see if they were made timely. If everything appears correct, you may have to involve the Taxpayer Advocate.
As mentioned, the IRS records are not wrong, they just lack the information necessary to offset or diminish the tax. You will probably have to gather some evidence and you may have to file an amended return. In this example, check the box in the upper right-hand corner of the Form 940.
To adequately review your case, you may follow the TaxHelpLaw Business Tax Prep Steps or the Return Error Prep Steps & contact this office!