ERC, Notices for incorrect information returns, Disaster relief, 1099-K

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e-News for Payroll ProfessionalsMarch 1, 2024

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Issue Number:  2024-02

Inside This Issue

  1. Urge clients to review warning signs and resolve incorrect ERC claims soon
  2. Payers may get notices CP2100 and 2100A about information returns with errors
  3. Disaster relief news
  4. For sharing: Updates to Form 1099-K frequently asked questions
  5. Updates to IRS forms, publications

 1.  Urge clients to review warning signs and resolve incorrect ERC claims soon


The IRS shared seven warning signs of incorrect Employee Retention Credit claims and is urging businesses to revisit their claims and apply to the ERC Voluntary Disclosure Program before the March 22, 2024, application deadline. The program helps employers repay their ERC at a discount if they filed an incorrect ERC claim. There’s also an ERC Withdrawal Program for those who have claims that haven’t been processed yet. Please share the seven warning signs and the ERC Eligibility Checklist with clients.

Some businesses may need help from their payroll service provider to resolve an incorrect claim.

ERC information is available on IRS.gov for payroll service providers:

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 2.  Payers may get notices CP2100 and 2100A about information returns with errors


When banks, credit unions, businesses and other payers file information returns with data that doesn’t match IRS records, the IRS sends a CP2100 or CP2100A notice. The notices tell payers that the information returns they submitted have a missing or incorrect Taxpayer Identification Number, name or both.

Each notice has a list of payees with the issues the IRS found. Payers need to compare the accounts on the notice with their records and correct or update their records, if necessary. Payers may also need to correct their backup withholding on payments made to payees.

Tax Tip 2023-75 lists the most common information returns with errors, and links to more guidance on backup withholding.

Refer to Information Returns on IRS.gov for more information.

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 3.  Disaster relief news


Please see the following news releases regarding recent disaster relief areas:

You can also visit the disaster relief page on IRS.gov for all disaster related information.

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 4.  For sharing: Updates to Form 1099-K frequently asked questions


The IRS is asking payroll professionals to help remind employees, clients and partners about available Form 1099-K resources during the filing season. The agency recently revised FAQs for Form 1099-K, Payment Card and Third-Party Network Transactions, in Fact Sheet 2024-03, making substantial changes within the following FAQ sections:

  • General Information
  • What to Do If You Receive a Form 1099-K
  • Common Situations
  • Third Party Filers of Form 1099-K
  • Should My Organization Be Preparing, Filing and Furnishing Form 1099-K?

The IRS also recently updated the Understanding Your Form 1099-K page on IRS.gov, which includes other communications resources.

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 5.  Updates to IRS forms, publications


This information about revised IRS materials may be of interest to payroll professionals and their clients:

Forms:

Publications:

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