The IRS has retired Form 941-M, which is filed monthly by employers with serious payroll compliance problems. Also retired are the special deposit rules, which required deposits to be made into a special trust fund account within two banking days of payday. Those employers must now file Form 941 quarterly and deposit withheld taxes electronically, according to their regular deposit schedule.
Warning: Those employers haven’t wiggled out of heightened scrutiny. The IRS now recommends that auditors pursue civil injunctions against employers that have a prior history of not timely depositing their payroll taxes, and that continue to do so. What’s that? A civil injunction is a court order that requires employers to comply with the payroll reporting and deposit rules.
In addition, revenue officers will continue to identify and develop civil and criminal cases against noncompliant employers. (SBSE-05-1211-909)