IRS Letter 313C – Federal Tax Deposit Penalty Proposal

The IRS is proposing an averaged federal tax deposit (FTD) penalty because you haven’t provided a complete, accurate or legible record of federal tax liability (ROFTL). The ROFTL discloses tax liabilities to the IRS based on either the month or the day of the liability.

Type of Notice: Account information or change

Most common tax problem area: Business penalties

Other tax problem areas: Unpaid business taxes

Why you received IRS Letter 313C

  1. You filed an employment tax return but did not include a complete, accurate or legible record of federal tax liability (ROFTL), as required.
  2. The IRS sent you a notice, such as CP207 requesting a complete and accurate ROFTL.
  3. The IRS did not receive a ROFTL.
  4. The IRS sent Letter 313C to propose an averaged failure to deposit penalty. When you don’t provide a complete, accurate and legible ROFTL, the IRS averages the total tax liability and distributes it equally over the tax period. The IRS then applies your federal tax deposits to the averaged liabilities in the order deposits were received. As a result, the IRS may not count your client’s deposits as timely because the actual dates of your client’s tax liabilities cannot be accurately determined.

Your options to address IRS Letter 313C

  1. Provide the information requested

Notice deadline: 30 days

If you miss the deadline: A failure to deposit penalty will be assessed based on the averaged liabilities.

Want more help?

See your local tax pro for a free consultation.

Letter from the IRS?

Your local H&R Block tax pro can look into it for you.

Schedule a Free Consultation

Or call 855-536-6504

Related Information

How to Address IRS Business Tax Penalties

Understand the most common types of IRS business tax penalties for filing and paying late, and your possible options for requesting IRS penalty relief.

What To Do If You Can’t Pay Your Taxes

Learn about the different options when you can't pay or still owe money from a past return from the tax experts at H&R Block.