IRS issues guidance on FICA refunds

The IRS has issued a proposed revenue procedure that provides guidance to employers on obtaining employee consents to support Federal Insurance Contributions Act (FICA) and the Railroad Retirement Tax Act (RRTA) refund claims. The proposed guidance was issued in response to questions about what information must be provided in the employees consent and whether such consent may be requested, furnished and retained in an electronic format.

The proposed procedure clarifies that in addition to the employee’s name, address and taxpayer identification number, a valid employee consent must identify the basis of the refund claim and be signed by the employee under penalties of perjury. The proposed procedure also discusses what constitutes “reasonable efforts” to secure the employee’s consent when it cannot be obtained.

An employer may request, furnish and retain employee consent in electronic format as an alternative to paper. An employer is not required to solicit new employee consents for those requested prior to the publication of the final revenue procedure. However, an employer may rely on the proposed procedure for employee consents requested before the date the final revenue procedure is published.

Comments requested

The IRS requests comments regarding the specific requirements for a request for a consent and for the employee consent itself, the requirements for electronic employee consents, and the steps that will constitute “reasonable efforts” to obtain an employee consent. In particular, comments are requested on ways to formulate requirements that advance the goal of making the process more efficient while protecting the interests of employees. Comments may be submitted electronically on or before April 30, 2015 to: Notice.Comments@irscounsel.treas.gov. Include “Notice 2015-15″ in the subject line of any electronic submission. (IRS Notice 2015-15, IRB 2015-9, February 13, 2015.)

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