San Francisco Tax Preparation / CPA: Employee consent requirements for employer refund claims released
The IRS recently issued the employee consent requirements that an employer need to adhere to in order to support a claim for refund of overpaid taxes under the Federal Insurance Contributions Act (FICA) and the Railroad Retirement Tax Act (RRTA). The guidance clarifies the basic requirements for both a request for employee consent and the content needed for the employee consent. It also permits employee consent to be requested, furnished and retained in electronic format. In addition, the procedure contains guidance concerning what constitutes “reasonable efforts” if employee consent is not secured in order to permit the employer to claim a refund of the employer share of overpaid FICA and RRTA taxes.
The new guidance applies to employee consents requested as of June 5, 2017. It does not require employers to solicit new employee consents and will not affect the validity of any employee consent received pursuant to a request made prior to June 5, 2017, that was provided in accordance with existing law. For employee consents requested before June 5, 2017, employers may rely on the proposed revenue procedures set forth in Notice 2015-15.