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.

Related Topics

Related Resources

How to File Business Back Tax Returns with the IRS

Learn how to file your business back tax returns with the IRS and resolve any related tax issues, such as business back taxes and IRS penalties.

IRS Notice CP63 – The IRS is Holding Your Tax Refund

Learn more about notice CP63, why you received it, and how to handle an IRS CP63 notice with help from the tax experts at H&R Block.

IRS Letter 4046 – Acknowledge Receipt of Appeals Request

Learn more about letter 4046, why you received it, and how to handle an IRS 4046 letter with help from the tax experts at H&R Block.

Tax Dictionary – Penalty Abatement

Get the facts from H&R Block about the most common types of IRS penalty abatement: first-time penalty abatement and reasonable cause penalty relief.