SBSE Memo Provides Interim Guidance on FUTA Certifications

Expiration Date: September 10, 2022
Impacted IRMs: 4.23.8

September 10, 2020

MEMORANDUM FOR:
LARGE BUSINESS & INTERNATIONAL (LB&I), TAX EXEMPT/GOVERNMENT ENTITIES (TE/GE), AND SMALL BUSINESS/SELF EMPLOYED (SB/SE) EMPLOYEES AFFECTED BY EMPLOYMENT TAX POLICIES AND PROCEDURES

FROM:
Wanda R. Griffin, Director,
SB/SE, Exam, Specialty Exam Policy

SUBJECT:
Interim Guidance on FUTA Certifications

Purpose: The purpose of this memorandum is to provide revised guidance on employment tax procedures regarding FUTA certifications.

Background/Source(s) of Authority: Revised instructions are provided to clarify FUTA examination procedures and refer examiners to the correct sections of IRM 4.23.10 as recently revised.

Procedural Change: To allow the credit for state unemployment payments in computing FUTA tax in examinations for previously unreported wage payments, for both IRC 6020(b) returns and examination adjustments, IRM 4.23.8 will cross-reference to recently published IRM 4.23.10, specifically IRM 4.23.10.11, Credit for FUTA Tax in Examination.

Paragraph 5 of IRM 4.23.8.7 will be revised to read:

When additional FUTA wages are discovered during an examination, the taxpayer should report the additional wages to the state if they are subject to state contributions. Before allowing any credit for additional contributions paid or the additional credit under IRC 3302(b), see IRM 4.23.10.11, Credit for FUTA Tax in Examination, for an in-depth discussion of taxpayer obligations and examiner procedures.

Effect on Other Documents: This guidance will be incorporated into IRM 4.23.8 by September 10, 2022.

Effective Date: September 10, 2020

Contact: If you have any questions concerning this interim guidance, contact Laird MacMillan, Policy Analyst, SB/SE Employment Tax Policy at (763) 347-7383.

Distribution:

IRS.gov (http://www.IRS.gov)