Penalty for Using 8109-B?

[Guest North Meets South]

Y'all, I am having such a hard time finding what I need by "Searching" these forums. I know that's a whole nother topic, but I wonder if I'm the only one?!? I get very few, very old results that come up...

Anyway, I have as a client a small dental office who uses a payroll company. There is a distribution that requires 945 w/h, and the payroll company won't do it. (Don't ask me why, I don't know). So we sent this client an 8109 to fill out and take to her bank with a check for the withholding. She just called back to say that her CPA told her the IRS may impose a penalty (!!!) for her using a non-electronic form of payment!

Has anyone heard of this, and if so, what is this client's option to get the 945 paid? The only remedy I could think of was to wait and send it with the 945 at the end of the year. But there'd be a penalty for that, too, right?

Thanks for ANY advice!

[Sully]

Make the check payable to U. S. Treasury and mail with the 8109 to:

Financial Agent

FTD Processing

P. O. Box 970030

St. Louis, MO 63197

Also, don't forget about any required state tax withholding.

[Guest North Meets South]

In the words of my 12-year old: Duh. I'm sure it's printed right on the coupon, too, isn't it?!?

Thanks! Sorry to waste your time!

[Kimberly S]

If they payer is required to make electronic deposits, there could be a problem with mailing a check. It's been almost a decade since I dealt with those rules, so you'll need to get the details of who is required to file electronically from someone who is up to date on those details.

[WDIK]

My guess is that the company itself may have the electronic deposit requirement, but this should not apply to the plan. (Assuming it has a separate tax identification number.)

[SheilaD]

You are required to electronically deposit the 1099 withholding if your 2008 withholding for that plan exceeded 200,000 or you were required to electronically deposit in 2008.

[SMB]

Probably not big deal, but the instructions to form 8109 and 8109-B indicate to also make the check payable to the "Financial Agent".

[Bird]

My guess is that the company itself may have the electronic deposit requirement, but this should not apply to the plan. (Assuming it has a separate tax identification number.)

That's the answer and bears repeating. We (still) do it both ways, with an 8109-B deposit at a local bank, and by sending a check to "Financial Agent" in St. Louis. We're doing it the latter way for plans that aren't used to doing it via the 8109-B coupon, and asking for the check and mailing it ourselves to make sure it gets done. Both work.

[Guest Jennyb473]

It is not difficult at all to set up EFTPS online - why not have the client do that and then they deposit the check into the corporate bank account and then initiate the EFTPS from the bank account? We have actually just set up most of our clients on EFTPS and pulling the money straight from the trust and skipping having a paper check issued, mailed to the client, deposited in the bank and then having them either file electronically or having the bank do it for them. It takes less than 5 minutes to set up online - but then takes a few weeks for the PIN to arrive and the account to be set up online and ready for use, but still very helpful!

[Guest North Meets South]

My guess is that the company itself may have the electronic deposit requirement, but this should not apply to the plan. (Assuming it has a separate tax identification number.)

That's the answer and bears repeating. We (still) do it both ways, with an 8109-B deposit at a local bank, and by sending a check to "Financial Agent" in St. Louis. We're doing it the latter way for plans that aren't used to doing it via the 8109-B coupon, and asking for the check and mailing it ourselves to make sure it gets done. Both work.

Have you ever seen a penalty for doing it either of these ways?!? Our "missing link" here is the Payroll Co I think. Why can't they just do it when they do the 941??? I am so frustrated! These rules are confusing enough, but trying to explain how to do this to a client is nearly impossible! Not to mention extremely time consuming...

Thanks.

[Bird]

Have you ever seen a penalty for doing it either of these ways?!? Our "missing link" here is the Payroll Co I think. Why can't they just do it when they do the 941???

No, there's no penalty because there's no electronic deposit requirement for the plan. The p/r company would have to set up a separate customer (the plan) with a separate ID number, etc. etc.

[K2retire]

If the payroll company is not processing the distributions (and I've never heard of one that does) they would not have the information needed to do the filings.