Tax agency correspondence

Overview

Tax agency correspondence is a notification mailed to an employer via email or through a physical letter. These letters help alert employers about problems related to their account or processes related to payroll.

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Common causes for government correspondence

When an employer receives a tax agency correspondence it is often for one of the reasons below. The best way to investigate correspondence is to read over it and identify if any of the scenarios below caused issues for an employer—if there's a match, the best action is to immediately ask the employer to correct information.

While not guaranteed, Zeal will try to refile or re-submit tax payments if an employer submits proper information within 30 days after quarter-end. It's important to note that late penalties and interest will be the employer's liability, however.

New hires

The employer did not validate an employee's SSN, and the SSN is invalid.
An employee entered an incorrect name.

Power of Attorneys

Their business address was not registered with the IRS.
The business name was misspelled or shortened incorrectly.
The Federal Employment Identification Number (FEIN) or a Tax ID is in an incorrect format.

Delay of tax filings and payment

Their Tax IDs were not submitted on time resulting in delayed filings.
Their documents weren't notarized on time.
TPA access was not granted on time.
The additional instructions on the Tax Setup page weren't followed.

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Other causes for correspondence

While most tax agency correspondence is caused by end-user errors, there are certainly other causes. These are the support tickets you should create with Zeal so we can help you to investigate.

Situation	Cause	Explanation
Late report, file, or payment	Delay in government processing times	Due to the pandemic and short-staffing, many tax agencies are delayed in processing new hire reports, Power of Attorneys, and processing manual payments. These correspondences often get self-corrected, but may need escalation from Zeal.
Follow up claims about late reports, files, or payments	Delay in correction time	Sometimes errors or late filings/payments are already fixed by an employer or Zeal, but a tax agency will still send correspondence. Some tax agencies send notices up to 10 weeks after a problem has been resolved simply due to how their notification systems are built.
Incorrect report, file, or payment	Errors in payment or filing	Zeal closely monitors tax formatting changes and audits our work—sometimes, small changes occur that Zeal is unable to catch. Tax agencies send correspondence directly to an employer—often this also means Zeal doesn't get alerted by the tax agency if a filing or payment failed. If this happens, Zeal will investigate the correspondence and correct any errors after it's sent to us.

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Classifications of correspondence

Although tax agency correspondence might look scary at first, it's very common. Below are the tiers of tax agency correspondence based on their risk and urgency. Tiers go in order from A to C, with C being the most severe.

Tier A

This is non-urgent correspondence, and will be corrected prior to quarter-end. This type of correspondence generally results in no damages, but may have minimal impacts. Zeal will normally correct all of these issues on behalf of end-users.

The correspondence reminds the employer of their deposit schedule.
The correspondence updates the employer of their SUTA tax rates.
The correspondence claims that a new hire has an invalid SSN or details
The correspondence claims that garnishment payment was not received by the employer within the quarter period.
The correspondence claims that a payment has bounced back or was received late, and the payment was due in-quarter.
The correspondence claims that a filing has bounced back or was received late, and the filing was due in-quarter.

Tier B

This correspondence is somewhat urgent and should be prioritized within a few weeks and before quarter-end. Zeal will normally correct all of these issues on behalf of end-users if the correspondence is received within 30 days after quarter-end.

Any Tier A cases that are not correspondences claiming in-quarter issues, but prior quarter issues.
The correspondence claims that a filing or payment was not paid for a prior quarter.
The correspondence claims late penalties, interest, or other fees for issues in a prior quarter.

Tier C

This correspondence is urgent and should be handled immediately (within 1-5 business days)—it will likely need to be managed by the employer as well. As Zeal refunds the employer with any tax funds collected 45 days after quarter-end that we were unable to remit, employers will have their funds back to remediate issues. Employers normally resolves these issues themselves because of (i) the urgency of the correspondence; (ii) the damaging potential to not resolve the correspondence; (iii) in almost all scenarios this correspondence is caused by employer negligence in not following compliance alerts or (iv) the employer’s negligence to read their correspondence letters and send them to the partner/Zeal on time.

The correspondence is claiming issues of lack of filing for 2 quarters prior.
The correspondence claims late penalties, interest, or other fees for issues for 2 quarters prior.
The correspondence is claiming that they will shut down your tax account in a set period of time (Ex: 30 days) if you do not resolve the issues.
The Employer is now receiving debt collection notices, in addition to the tax correspondence from the agency.
Unemployment claims from end-employees.

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Tax correspondence support

Please open a support ticket related to Tax Correspondence. Our team will classify each ticket according to its tier and work to resolve issues as expeditiously as possible. Keep in mind that while Zeal hopes to resolve each ticket quickly, tax correspondence issues are more time-consuming because of the investigative work that needs to happen.

Oftentimes with the tricker tax correspondence issues, our internal team needs to call tax departments that are very understaffed—they often have long call-back times and even longer resolution times for investigation (5-60 business days). For many tax correspondence issues, employers are also responsible for taking action and providing needed information to help resolve issues. Delays in obtaining this information will result in delays to resolving a tax correspondence issue.