Reporting employment tax discrepancies.

• Position: From The IRS

The IRS is issuing a new schedule to make it easier for taxpayers to provide information about employment tax discrepancies created by an acquisition, statutory merger or consolidation. Rev. Proc. 2004-53 provides guidance on the new schedule and on filing employment tax returns after an acquisition.

Schedule D: An acquisition, merger or consolidation that creates a discrepancy between the information reported (1) to the Social Security Administration on Form W-2 and (2) on Form 941, Employer's Quarterly Federal Tax Return, can be explained on new Form 941, Schedule D, Report of Discrepancies Caused by Acquisitions, Statutory Mergers, or Consolidations, even if the employer e-filed its employment tax return. However, not every employer experiencing a merger or acquisition should file Schedule D; it should be filed only for:

* Statutory mergers and consolidations.

* Acquisitions meeting the requirements for predecessor successor status.

New procedure: Rev. Proc. 2004-53 has three purposes:

1. To explain both the standard procedure and an alternate for preparing and filing Forms W-2; 941; W-4, Employee's Withholding Allowance Certificate; and W-5, Earned Income Credit Advance Payment Certificate, in certain acquisitions. It supersedes Rev. Proc. 96-90, and applies when an employer (successor) acquires substantially all the property used in (1) another employer's (predecessor's) trade or business or (2) a separate unit of a predecessor's trade...