Wrong 941 deposit schedule

[BHoffman]

Client received a Notice CP220 regarding "Changes to your 941 form" for Sept. 2015 in the amount of around $645.  There is absolutely no other information on the Notice.  He uses Quickbooks payroll and makes the deposits and files his own quarterly forms.  

I don't know what this penalty is for, but he made on-time monthly deposits that matched his 3Q 2015 941 according to his EFTPS record and 941 copy.  I checked the lookback period and he should have been making 3 day deposits.  

I'm wondering whether he shouldn't just pay the $645 and not kick the dog, but I don't know if this would be a mistake or a wise course of action.  The penalties could be heinous, and this company is circling the drain as it is.

BTW:  I checked the lookback for 2014 and for 2016.  Both of those years put him on a monthly deposit schedule.  Don't know if that matters.

 

[WITAXLADY]

I have had good luck with getting the penalties abated for first time delays in reporting with the exact same situations... just write and explain and ask for abatement first time and in compliance now. 

D

[jklcpa]

Was Sch B filled out based on the correct payment schedule but client deposited monthly?  If not, the IRS won't be able to calculate the penalty accurately.

[BHoffman]

Oooooh Judy good point!   No Sch B was filed and no other notices have been received.  The client decided to just pay it and is now making 3 day deposits whether he has to or not.