Employee 2019 Tax Issue

Due to a mistake Monomoy Regional School District made, the Internal Revenue Service (IRS) believes some individuals received more income from the district than they actually received. We have to take steps to correct this information so that those individuals are not required to pay additional taxes. Once these steps are taken, we believe the people affected will not be required to pay any additional taxes, interest or penalties due to this error.

The district submitted incorrect information to the IRS for the year 2019. This information reported certain staff as having received retirement benefits from Monomoy Regional School District.  This was incorrect and no information should have been reported to the IRS.

The IRS is now recalculating tax payments based on this incorrect information. As a result, some staff have received letters from the IRS explaining that the IRS believe they owe additional taxes.

Every January the district submits 1099 information to the IRS for the previous tax year. This is information that shows payments that were made to certain types of contractors. The district also issues 1099 forms to those vendors.

In January 2020, the district submitted the wrong file. The district did not submit 1099 information but instead submitted 1099-R information and did not include contractors but included many past and present employees. The district does not issue retirement payments and no 1099-R information should have been reported.

The IRS has started to process the information in this file. Based on this incorrect information the IRS is sending letters to those individuals with new proposed tax payments.

2019.

No, this information was only submitted to the IRS. 

None. The district does not pay retirement benefits.

The district is submitting a corrected file to the IRS. This will update the information that the IRS has for the individuals in the file.

If you receive a payment request from the IRS relating to this issue, then you should follow the steps to disagree with their information. The district will send each person affected by the error a letter on district letter head that explains the error and a 1099-R form with all values set to zero. This information should be included with correspondence to the IRS regarding this issue.

• If you have not received a letter from the IRS about this issue: Do nothing, and keep the documents we send you so that you may use them if you do receive a letter from the IRS.
• If you have received a letter from the IRS about this issue: You must respond to the IRS letter. If you have received a CP2000 notice, there is a response form. Complete the response form and send back to the IRS. Include with the form:
  • Statement signed by you that explains what you don’t agree with (the district will also send you a template you can use).
  • Monomoy Regional School District letter explaining the issue.
  • Corrected 1099-R issued to you by Monomoy Regional School District.

At the moment, the advice the district has received from the IRS is that you should not submit anything to them until you receive a letter proposing payment.

We will let you know if that changes.

We believe that once this issue is cleared up and the correct information is provided to the IRS you will not have to pay any additional taxes to the IRS based on this issue.

The additional payment requested by the IRS depends on your own circumstances and is not the same for everyone. However, we believe that once this issue is cleared up and the correct information is provided to the IRS you will not have to pay any additional taxes to the IRS based on this issue.

No. This was a typo in the email and not in your address in the district records.

If you receive a payment request from the IRS relating to this issue, then you should follow the steps to disagree with their information. The district will send each person affected by the error a letter on district letter head that explains the error and a 1099-R form with all values set to zero. This information should be included with correspondence to the IRS regarding this issue.

If you have not received a payment request from the IRS, you should keep these documents for your records and use them to respond to the IRS if you receive a payment request.

The district is planning to send out documentation by mail on April 7th and 8th. If you have not received the documents shortly thereafter please contact the MRSD Business Manager Michael MacMillan at 508-945-5148 or mmacmillan@monomoy.edu.

The district is planning to send out documentation by mail on April 7 and 8, 2021. After that, if you need copies of the documents, please contact the MRSD Business Manager Michael MacMillan at 508-945-5148 or mmacmillan@monomoy.edu.

The district will send you two documents:

1. A letter on district letterhead that explains what happened.
2. A 1099-R form for you that shows all the dollar values set to zero.

The top part of the form should go to the IRS.  The bottom half is for your records.  Although it says on the form that it can be used for 'State, City or Local Tax Department' it does not need to be submitted of these bodies and can be saved for future reference. 

The fields should be blank.  The 1099-R form is designed to have blanks fields where there are no monetary values.  In the case of the corrected 1099-R all the values now equal $0.00 and so appear on the form as blanks.  

The address on the newly issued 1099-R forms is the address that was linked to the original IRS submission. It is not a problem that it is no longer your current address. 

No, this is fine.  The IRS will disregard the bottom half of the form. 

We have attached a template letter for you to use to respond to the IRS.  Please note that this is in addition to the letter from the district and the 1099-R form.IRS Template Letter

A 1099-R form is an IRS form used to report payment of retirement benefits such as pensions. Although you did not receive any such benefits from Monomoy Regional School District, the IRS believes that you did due to the file that the district submitted.

Sending a 1099-R form with all the dollar values set to zero to the IRS will correct the information they have already received.

We believe that once this issue is cleared up and the correct information is provided to the IRS you will not have to pay any additional taxes or penalties to the IRS based on this issue.

Once the correct information is provided to the IRS, you should not have to pay any additional taxes, interest or penalties to the IRS due to this issue.

According to the IRS website, the IRS uses several different methods to determine which individuals to audit so it is difficult to know what will be the impact of one transaction on the likelihood of being audited. Once this issue is resolved there should be no changes to your 2019 tax return and there should be no penalties or interest charged due to this issue – hopefully this will mean that you are no more likely to be audited as a result of this error.

If you have received a letter from the IRS, then you should reply. You should never ignore correspondence from the IRS.

If you have not received a letter from the IRS, then you do not have any actions until you do.

Although the district will submit corrected information to the IRS, unfortunately, the district is not able to deal with individual tax issues. The IRS will not recognize the district as representing individuals for tax purposes.

Nevertheless, the district is committed to doing everything necessary to minimize the impact of this error on individuals. We will provide you documentation to help respond to the IRS.

Seeking legal representation is a personal decision.

If you normally work with a tax advisor or accountant, you may wish to share this information with them.

The district cannot provide tax advice however, we have not received any information that suggests you should postpone 2020 tax return as this relates to the 2019 tax year.

The district will be contacting everyone affected by this issue.

No, this is an unrelated issue.

We can send your documentation by email. Please contact the Business Office to request electronic copies: Michael MacMillan, School Business Manager, 508-945-5148 or mmacmillan@monomoy.edu.

The district cannot provide tax advice however, it may be sensible to include the documentation the district provides with your 2019 tax return.

You will not have to resubmit your 2019 or 2020 tax return. However, you will need to respond to any correspondence you received from the IRS.

The district is not able to use public funds to pay for individual tax or legal advice. However, if you believe you will incur costs due to this error and wish to receive reimbursement from the district please contact the district before receiving those services. Michael MacMillan, School Business Manager, at 508-945-5148 or mmacmillan@monomoy.edu.

This should not impact your 2020 tax return. However, any funds owed to or from the IRS will be impacted by this issue unless it is resolved. That is why the district will be submitting new information to the IRS and providing information as to how to respond if the IRS contacts you.

The IRS doesn't initiate contact with taxpayers by email, text messages or social media channels to request personal or financial information. Please see information available on tax scams: https://www.irs.gov/newsroom/tax-scams-consumer-alerts and how to tell if it’s really the IRS contacting you: https://www.irs.gov/newsroom/how-to-know-its-really-the-irs-calling-or-knocking-on-your-door.

No. The district does not issue retirement payments.

The district has not received any information to suggest that the 2019 W2 is incorrect. Your W-2 should not be impacted by this error (although the IRS will use the W-2 information, this incorrect 1009-R information, and any other documentation they receive to determine the required tax payment).

No. This will not affect your retirement plans.

A W-2 is the form that an employer sends to an individual, and files with the IRS, to show the employee’s annual wage and the taxes withheld from their wages. This information was reported accurately by the district.

A 1099-R form reports retirement benefits paid by an organization to an employee, this is not the same as the annual wages in the W-2. 

The IRS will use information received from W-2s, 1099s and any other sources to determine your total income for the year and appropriate taxes.

The letter that the IRS will send is a CP2000 notice, this is described as follows by the IRS:

When a tax return’s information doesn’t match data reported to the Internal Revenue Service by employers, banks and other third parties, the IRS will send a letter to the taxpayer. The letter is called an IRS Notice CP 2000, and it gives detailed information about issues the IRS identified and provides steps taxpayers should take to resolve those issues.

(https://www.irs.gov/newsroom/irs-explains-cp-2000-letters-sent-to-taxpayers-when-tax-return-information-doesnt-match-information-from-3rd-parties#:~:text=When%20a%20tax%20return's%20information,a%20letter%20to%20the%20taxpayer.&text=This%20letter%20gives%20detailed%20information,the%20agency%20determined%20the%20change.)

The following IRS you tube video provides helpful information on the CP2000 notice: https://www.youtube.com/watch?v=3R0POvqL3Ko

A 1099-R form is an IRS form used to report payment of retirement benefits such as pensions.

Please contact Michael MacMillan, School Business Manager, at 508-945-5148 or mmacmillan@monomoy.edu to ensure you receive the correct documents from the district.

The district is trying to contact everyone who may be affected. However, some of the people affected left the District’s employment many years ago and up-to-date contact information is not always available. If you have not been contacted by the district or IRS but you are still concerned you may be been impacted, please email Michael MacMillan, School Business Manager, at mmacmillan@monomoy.edu who can confirm whether or not you were impacted.

Please call Michael MacMillan, School Business Manager, at 508-945-5148 or mmacmillan@monomoy.edu.