IRS Revises Form Used to Report Employment Tax Discrepancies After Acquisition, Merger, or Consolidation

There is now a June 2011 version of Form 941, Schedule D, Report of Discrepancies Caused by Acquisitions, Statutory Mergers, or Consolidations, and its instructions on the IRS website. The form was last revised in April 2010.

Employers file Schedule D to explain certain discrepancies caused by acquisitions, statutory mergers, and consolidations in the amount reported on Forms W-2 and 941 for Social Security wages, Medicare wages and tips, Social Security tips, federal income tax withheld, and advance earned income credit (AEIC) payments (for tax years ending before Jan. 1, 2011). Each party to the transaction must file its own Schedule D. The schedule does not need to be filed, even if there is an acquisition, statutory merger, or consolidation, if there aren't any of the discrepancies noted above between Forms W-2 and 941.

The new version of the form notes that the AEIC may not be claimed after the 2010 tax year. The form also has a new mailing address. The mailing address for Schedule D is now: IRS Philadelphia Campus, Mail Stop 4-G08 151, 2970 Market Street, Philadelphia, PA 19104. The IRS cautions filers that there is a different mailing address for Form 941. Schedule D may also be filed electronically with Form 941.

Deadline for filing Schedule D. The deadline for filing Schedule D depends on whether the business continues to operate after the statutory merger, acquisition, or consolidation. If the business continues to operate, the form should be filed no later than by the due date for the first quarter Form 941 after the calendar year of the transaction. If the business does not continue to operate, the form should be filed with the final Form 941. For example, if the transaction occurred in the third quarter of 2010, and the business is continuing to operate, an employer would have needed to file Schedule D no later than the deadline for filing Form 941 for the first quarter of 2011 (i.e., May 2, 2011). However, if the business did not continue to operate, an employer would have been required to file Schedule D no later than the deadline for filing Form 941 for the third quarter of 2010 (i.e., Nov. 1, 2010).