Your Employee Received a CP3219A/B/N?

Received CP3219 Notice/Letter 3219

This IRS correspondence indicates that the receiver have received tax return information that differs or is not reported from third parties such as their Employer, Banks or Financial Institutions.

There are multiple variations of this Notice/Letter here is a brief differentiation of each:

• CP3219A: This notice is sent when the IRS identifies discrepancies between the income, credits, or deductions reported on your tax return and information received from third parties, such as employers or financial institutions. It proposes changes to your tax return and informs you of your right to challenge these changes in U.S. Tax Court
• CP3219N: This notice is issued when the IRS has not received the receiver's tax return and has calculated their tax, penalties, and interest based on information reported by third parties.
• Letter 3219 : (also known as the Notice of Deficiency) is another formal IRS communication. It serves as a final warning to taxpayers regarding tax deficiencies before the IRS can assess additional taxes. This is essentially the last step before IRS action.

An easy differentiation is that CP3219 Notices are more focused on proposing change or estimating taxes if a return wasn't filed, where as Letter 3219 is your last warning before the IRS takes action to assess and collect additional taxes.

CP2000: You might have also come across CP2000, Notice CP2000 is a notice that's sent before Letter 3219 but is related to underreporting of income -- Read more about that here.

How the Notice Would Look Like

The CP3219 Notice is a formal document from the IRS, typically printed on official letterhead. Key elements you should look for include:

• Notice Code: CP3219
• IRS Contact Information: A return address for further correspondence.
• Taxpayer Information: Your name, address, and possibly your Social Security number.
• Details of the Discrepancy: A section that outlines the discrepancies between your reported income and what the IRS has on file.
• Important Action Steps: Instructions detailing how you can contest the findings or agree with them.

What are the Consequences

The consequences of each notice—CP3219A, CP3219N, and Letter 3219—vary based on their purpose and the actions you take in response.

Consequences of CP3219A if ignored

Consequences of CP3219N if ignored

Consequences of Letter 3219 if ignored

What Are the Employer's Actions to Be Taken?

If you, as an employer, receive a CP3219 notice related to discrepancies in employee income reporting or payroll tax issues, it’s crucial to take immediate steps to address the situation:

1. Verify Employee Records:
   • Cross-check the reported income, withholding, and benefits data for any errors in your payroll system.
   • Ensure that all Forms W-2 and 1099 submitted to the IRS are accurate.
2. Communicate with the Affected Employee:
   • Inform the employee if their reported income does not match IRS records.
   • Provide corrected forms (e.g., W-2c) if discrepancies are identified.
3. File Corrected Forms (if needed):
   • Submit any corrections using Forms W-2c (Corrected Wage and Tax Statement) or Form 941-X (Adjusted Employer's Quarterly Federal Tax Return) to amend payroll tax filings.
4. Respond to the IRS:
   • Provide documentation supporting the accuracy of your original filings if you disagree with the notice.
   • Use certified mail to submit responses and corrections to ensure they are received by the IRS.
5. Review Payroll Compliance:
   • Conduct an internal audit of your payroll processes to prevent future discrepancies.
   • Consider consulting a tax professional if the notice involves complex corrections or potential penalties.

Taking these steps promptly helps avoid further penalties and ensures compliance with IRS regulations. If you require help to get all of these in order, check out Stellar's Business Notice Resolution service to get matters handled today.

What are the Receiver's Actions to Be Taken

1. CP3219A (Proposed Changes)

• Agree: Sign Form 5564, mail it, and pay any balance due.
• Disagree: Send supporting documents with an explanation and unsigned Form 5564. If unresolved, file a petition with the U.S. Tax Court using Form 2 within 90 days.

2. CP3219N (No Return Filed)

• Agree: File the missing tax return and pay any due amount.
• Disagree: File a return, attach the notice, and provide proof if already filed. Petition with Form 2 if unresolved within 90 days.

3. Letter 3219 (Final Notice of Deficiency)

• Agree: Sign Form 5564 and pay the tax due.
• Disagree: Collect evidence, submit a petition with Form 2 to U.S. Tax Court within 90 days (150 days if overseas).

What is the Time Frame to Resolve?

Typically, you are given 30-90 days from the date of the notice to resolve the issue. It's essential to act swiftly to avoid any penalties. Delaying your response could lead to increased liabilities or other adverse effects, so don't procrastinate.

Call Stellar to Help Execute This for You

Navigating IRS communications can be stressful, but you don't have to do it alone. Contact Stellar today for expert assistance in managing your CP3219 Notice. Our team can help simplify the process, ensure you understand your options, and work towards resolving the issue efficiently.

Book a Call Now

Don't let a notice from the IRS overwhelm you. Book a consultation with Stellar today and take the first step toward resolving this matter. Prompt action is crucial to protect your finances and resolve any discrepancies with the IRS.