The IRS has issued a notice and a proposed revenue procedure that cover the steps you must take to obtain employees’ consent before you refund overwithheld FICA taxes to them. The notice allows employees to furnish consent electronically and also clarifies your “reasonable efforts” if you can’t secure their consent.
Key: These rules don’t apply to refunds of overwithheld additional Medicare taxes. You may rely on this proposed revenue procedure until the IRS issues a final revenue procedure. (Notice 2015-15, IRB 2015-9)
Request for employees’ consent. In general, you can’t receive a refund of the employer’s share of overwithheld FICA taxes without first refunding employees their share of overwithheld FICA taxes or obtaining their consent to pursue refunds on their behalf. Exceptions apply if, after a reasonable effort, you can’t find long-gone employees or employees refuse to grant you consent to pursue refunds on their beha...(register to read more)