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IRS Sending Letters to Employers for Form 7200 Processing Delays

BY: Curtis E. Tatum, Esq. | 07/24/20

The IRS started sending letters to employers if they are experiencing a delay in the processing of their Form 7200, Advance Payment of Employer Credits Due to COVID-19 [IR-2020-158, 7-15-20].

Background

The Families First Coronavirus Response Act provides a tax credit to eligible employers that pay qualified emergency sick leave and expanded family and medical leave wages. The Coronavirus Aid, Relief, and Economic Security (CARES) Act provides an employee retention credit to eligible employers that operate their businesses and retain employees despite experiencing economic hardship related to COVID-19. Employers may file Form 7200 to request an advance payment of the tax credits that will be claimed on Forms 941, 944, or CT-1.

Rejected Forms

Employers will receive Letter 6312 if the IRS either rejected Form 7200 or made a change to the requested amount due to a computation error. The letter will explain the reason for the rejection or list the corrected payment amount.

Address Verification

Employers will receive Letter 6313 if the IRS needs written verification that the business address listed on the Form 7200 is the business’ current mailing address. To change the business address to the one listed on Form 7200, employers must complete Form 8822-B, Change of Address or Responsible Party – Business. Employers that want the payment sent to the address of record should check the box on Letter 6313 and return it to the IRS. Form 7200 will not be processed until the IRS receives a response to Letter 6313.

To learn more about federal and state laws, regulations, and information to keep your company's payroll operations in compliance, check out Payroll Source Plus!


Curtis E. Tatum, Esq., is Director of Federal Payroll Compliance for the APA.