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In the IRS’s own words · not reviewed by VALID
CP235 notice explained, in the IRS’s own words
The prior deposit schedule was used. We sent you a notice explaining that your deposit schedule changed, but you didn’t make deposits according to the new schedule and therefore you were subject to a Failure to Deposit penalty. Fortunately, we’re able to waive the deposit penalty because your schedule recently changed.
Read the full CP235 page on irs.gov ↗
What this notice is about
The prior deposit schedule was used. We sent you a notice explaining that your deposit schedule changed, but you didn’t make deposits according to the new schedule and therefore you were subject to a Failure to Deposit penalty. Fortunately, we’re able to waive the deposit penalty because your schedule recently changed.
What you need to do
- Review your deposit requirements.
- The lookback period is:
- for annual returns, the second previous year;
- for Form 941 the four quarters ending with the second quarter of the previous year. If you used Form 944 in either of the two prior years, the lookback period is the second previous year.
- Monthly depositors must deposit by the 15th of the following month. If the 15th is a weekend or holiday, the deposit is due the next business day.
- Semiweekly depositors with payroll on Wednesday, Thursday, or Friday must deposit on the following Wednesday. Those with payroll on Saturday, Sunday, Monday, or Tuesday must deposit on the following Friday.
- To avoid future penalties, use the correct deposit schedule immediately.
I did not receive a notice showing the change in deposit schedule.
You are required to determine the correct deposit schedule, even if you don’t receive a notice. We send a notice in November if your deposit requirement changed, based on the original returns from the lookback period. We don't consider amended returns. If a return is not filed when we send the notices, we won’t be able to determine the correct deposit schedule.
Tips for next year
Check your deposit requirements for next year by this October so you will have time to adjust your payroll deposits if your deposit requirements change.
Reference tools
- Publication 1, Your Rights as a Taxpayer
- Publication 17, Your Federal Income Tax
- Full list of tax forms and instructions
Need help?
- You can authorize someone to contact the IRS on your behalf.
- If you can’t find what you need online, call the IRS number on your notice or letter. If you didn’t receive a letter or notice, use telephone assistance.
- If you can't resolve the penalty on your own, contact Taxpayer Advocate Service, an independent organization within IRS.
What to do next
- Write down the date on the letter today.
- Look the number up on irs.gov yourself. Don’t trust a link or phone number from anyone else.
- If it says you owe money or proposes changes to your return, take it to a licensed CPA, EA or tax attorney before that date.
Not advice. Not a filing. Verify with a licensed professional. Rules change by year and facts.