It can happen. You receive an official-looking letter from a government agency or a court that’s filled with a lot of legalese. What do you do? The following is an update to a blog that we posted several years ago. It deals with notices that are from federal or state agencies…and how to respond.
Important notices and how to respond
Identify the type of letter
In many cases a government agency—on the federal or state level—gets directly involved in your business, instructing you what to do. Be sure to understand what an official notice is all about so you can respond timely and correctly.
Here are some examples of notices you may receive. This list is not exclusive:
- Employee Benefits Security Administration (EBSA) notices. These relate to retirement and employee benefits plans subject to ERISA rules. A notice may, for example, relate to a late-filed or missing form in the 5500 series. If you have questions about a notice you’ve received, you can message the EBSA here.
- Garnishment. This is a notice or order instructing an employer to withhold a certain amount of wages to cover an employee’s debt, such as child support, as instructed by a court or a government agency. The notice tells how much to withhold and where to remit the withheld amount. An employer is prohibited from retaliating (e.g., terminating employment) because of a garnishment. Things get complicated when an employee is subject to more than one garnishment order.
- IRS letters. The IRS sends out notices and letters for a variety of reasons; the specific one is stated in the notice or letter you receive. It may be because you owe taxes, there is a question about an item on a return, or the IRS has changed something on your return. The IRS says: read, respond, and where required, pay. Each notice has a telephone number you can contact to find out more. The IRS also has general information to help you understand your IRS notice or letter. You may receive similar tax-related notices from your state or city/town.
- OSHA notices. OSHA can send out a variety of notices, including inspection notice (for an upcoming one or a follow-up to one that’s already been conducted), citation and penalty notices, and recordkeeping violations. You can learn more through elaws Advisors. If you have a question about a notice you received, you can call 800-321-OSHA.
- Unemployment claims. When a former employer files for unemployment benefits, you are notified. The reason for the notification: An employer can contest the person’s claim. For example, if the worker quit, he or she is not eligible for benefits; only those who are terminated can receive benefits (assuming the termination was not for serious cause). The reason to contest benefits where warranted is to keep your claims experience (and consequently your unemployment rate used for computing state unemployment taxes) down. The notice allows you to accept the claim or challenge it (with instructions on how to proceed).
Caution: Be sure that the notice or letter is genuine and not a scam. Typically, there is a phone number of any legitimate communication you receive, so call and check things out before providing any information requested in a notice or letter to your business.
What to do
NEVER ignore a government notice. There may be a limited time to contest an agency’s claim. For example, some OSHA notices have a period of 15 working days to reply.
Create procedures to be followed if any notice is received:
- Log in the notice.
- Note the agency it’s from.
- Note the response deadline.
Some notices or letters contain clear instructions on what to do. If you understand them and feel confident you aren’t creating additional problems for your company, then simply do what’s requested. For example, if you receive a garnishment notice and it’s the employee’s only one, you can refer this to your payroll department, your outside payroll service provider, or handle it yourself.
If, for any reason, you have concerns about what the notice means and how you should respond, then look to experts for assistance. For instance, if you receive a letter from the IRS regarding payroll tax deposits, you may want to talk with your CPA or other tax adviser about the question(s) raised in the letter.
Final thought
Whatever you do, don’t ignore the letter. Don’t bury it in a pile of papers. There may be deadlines for action and penalties or other adverse consequences for failing to comply.
You’ll find more blogs related to government notices in this list here.
