IRS sending letters about delayed employer tax credit payments

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The Internal Revenue Service said Wednesday it has begun to send letters to taxpayers who are seeing delays in the processing of their Form 7200, Advance Payment of Employer Credits Due to COVID-19.

A taxpayer will receive letter 6312 if the IRS has either rejected their Form 7200 or made a change to the requested amount of advance payment due to a computation error. The letter will explain the reason why the form was rejected or, if the amount is adjusted, the new payment amount will be listed within the letter.

Taxpayers will receive a different piece of correspondence, letter 6313, if the IRS needs written verification from them that the address listed on their Form 7200 is the current mailing address for their business. The IRS said it won’t process Form 7200 or change the last known address until the taxpayer provides it.

Taxpayers can file Form 7200 to request an advance payment of the tax credits for qualified sick and qualified family leave wages and the employee retention credit. The tax credits were provided by the IRS in response to legislation such as the CARES Act and the Families First Act to aid businesses and individual taxpayers who have been affected by the novel coronavirus pandemic, or COVID-19, which continues to spread across the country. With Wednesday being the day of the delayed Tax Day deadline, taxpayers are facing the prospect of filing their taxes in time to avoid penalties, but they can also take advantage of some of the tax breaks available to them as part of the IRS’s tax relief. However, July 15 also marks the day when the IRS’s People First Initiative ends, which provided tax payment and penalty relief for the first half of the year.

For more information on Form 7200 and advanced payments of the employer tax credit, click here. More information about coronavirus tax relief for businesses and tax-exempt entities can be found here.

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IRS Coronavirus Tax credits CARES Act Tax relief