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CP136 notice: what it means and what to do

Got an IRS CP136 notice? Here is what it means, your deadline, what to check before you answer, and how to reply. Check your own letter free: it stays on your phone.

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What the IRS says this notice is about

Your deposit requirements for your Form 941, Employer's Quarterly Federal Tax Return, filings for next year may be different from your requirements for last year. We base your deposit requirement on the total tax you reported on your Forms 941 for the four previous consecutive quarterly periods (the lookback period).

What you need to do

If your total tax liability for the lookback period was $50,000 or less, you will be a monthly depositor next year. Monthly depositors must deposit taxes on wages paid during the month by the 15th of the following month.
If your tax liability for the lookback period was over $50,000, you will be a semi-weekly depositor. Semi-weekly depositors must deposit taxes on wages paid on Saturday, Sunday, Monday, or Tuesday by the following Friday. Taxes on wages paid on Wednesday, Thursday, or Friday are due the following Wednesday.
If the tax amounts we used to determine your deposit requirement differ from your tax records, then you should determine the appropriate deposit schedule.
If the tax amount we used is zero for any tax period, then we have no record of receiving Form 941 for that period. Please file any missing Form 941 as soon as possible.

Your deadline

Answer by the date printed on your notice. If there is no date, answer as soon as you can, and call the number on the notice if you need more time.

What to check before you answer

Is this letter really from the IRS?

The IRS writes first by mail. A real letter shows a notice or letter number, your name and part of your tax ID number. The IRS does not ask for payment by gift card, crypto or wire transfer. If in doubt, sign in to your IRS online account, where many notices are listed.

You may want to

Visit IRS.gov for tax forms, instructions, and publications .
Check your records to verify that they show the same liability amount as the CP136.

Common questions

How do I show my payments when I file Form 941?

We have a record of your payments. We don't need you to show your payments. Show only the tax liabilities.

How do I show the tax liabilities?

If you are a monthly depositor, enter the taxes due for each month on Part 2 of Form 941. If you are a semi-weekly depositor, use Schedule B (Form 941), Report of Tax Liability for Semiweekly Schedule Depositors , to enter the tax due for each date you paid your employees.

What do I do if the tax liability on the notice is incorrect?

The tax on the notice includes only the tax liability on your original Forms 941 during the lookback period. Don't include amended returns. Base your deposit requirements on the original tax liability for the lookback period.

Do I have to file electronically?

You must pay all deposits electronically unless one of the two conditions apply:

Your tax liability is less than $2,500
The tax for the prior tax period was less than $2,500 and you did not have a $100,000 liability due the next day

If your tax for the quarterly tax period is less than $2,500, you can pay with the payment voucher attached to Form 941.

What if my accumulated tax liability reaches $100,000?

You must deposit the next business day. Once your accumulated tax liability reaches $100,000 for any month, you immediately become a semi-weekly depositor for the rest of the current year and the next year.

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Related notices

Source

IRS: Understanding your CP136 notice