The IRS has advised businesses that their payroll departments should NOT round payroll tax figures to the nearest dollar amount on 941 forms. This directive comes in a recent IRS memorandum opinion on the subject. The reasoning behind the memo would be funny if it wasn't true. The IRS says that there is a column on the 941 form for dollars and cents (not sense), and they can't remove that column, so you have to report every penny. Never mind that this new stance violates every principle of accounting and likely works against the IRS, the technocracy has spoken! I ran across this interesting letter in my imagination after reading this story:
Thank you for the new directive doing away with our usual practice of rounding whole numbers on 941 forms. We used to be scared to death to round numbers on these forms, so we always rounded high to avoid unnecessary embroilment with the Service. Thanks for expending resources for this directive in the midst of the budgetary shortfalls and understaffing you have been so vocal about experiencing. This will save us hundreds!
Every employer that complies with 941 filing requirements in America.
Travis Watkins is an Oklahoma City tax attorney working to help Oklahomans in tax trouble. If you have a tax problem, the tax code is complex. Call Travis today at 800-721-7054.