Scedule D (Form 941) - Report for Discrepancies Caused by Acquisitions, Statutory Mergers, or Consolidations

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Instructions for Schedule D (Form 941)

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Instructions for
Schedule D (Form 941)

Department of the Treasury
Internal Revenue Service

(Rev. March 2010)
Report of Discrepancies Caused by Acquisitions, Statutory Mergers, or
Consolidations
Section references are to the Internal Revenue Code unless
otherwise noted.

General Instructions

Each party to an applicable transaction (see
TIP below) files its own Schedule D (Form 941).

File Schedule D (Form 941) for:

Understanding Schedule D (Form 941)
These instructions tell you about Schedule D (Form 941),
Report of Discrepancies Caused by Acquisitions,
Statutory Mergers, or Consolidations. Employers can use
Schedule D (Form 941), to explain certain discrepancies
g , and
(caused by acquisitions, statutory mergers,
g and Tax
consolidations)) between Forms W-2, Wage
Statement ((Copy
py A)) and Forms 941, Employer’s
QUARTERLY Federal Tax Return, for the totals of social
security wages, Medicare wages and tips, social security
tips, federal income tax withheld, and advance earned
income credit (EIC) payments.

What Is Schedule D (Form 941)?
Each year the Internal Revenue Service (IRS) and the
Social Security Administration (SSA) compare the totals
on your Forms 941 with the totals from your Forms W-2
(Copy A), to verify the following.
• The wages you reported on Forms 941 match those
you reported on Forms W-2 (Copy A) so that your
employees’ social security earnings records are complete
for benefit purposes.
• You have paid the appropriate taxes.
Generally, the totals of all your Forms W-2 (Copy A)
should equal the aggregate quarterly totals you reported
on Forms 941. Use Schedule D (Form 941) if
discrepancies exist between the totals you reported on
those forms only as a result of an acquisition, statutory
merger, or consolidation.
IRS uses Schedule D (Form 941) to determine if
you have reported your wages and tax liabilities
CAUTION correctly. In many cases, the information on
Schedule D (Form 941) helps the IRS resolve
discrepancies without contacting you.

!

Who Should File Schedule D (Form 941)?
You do not need to file a Schedule D (Form 941) for
every merger, acquisition, or other reorganization that
occurs. File Schedule D (Form 941) only for those
acquisitions, statutory mergers or consolidations that
create discrepancies between Forms W-2 (Copy A) and
Forms 941 in the totals of:
• Social security wages,
• Medicare wages and tips,
• Social security tips,
• Federal income tax withheld, and
• Advance EIC payments.

• A statutory merger,
• A consolidation, or
• An acquisition for which you are using the alternate

procedure under Rev. Proc. 2004-53. See Rev. Proc.
2004-53, 2004-34 I.R.B. 320, available at
www.irs.gov/irb/2004 – 34_IRB/AR13.html.

Do NOT file a Schedule D for:

• An acquisition for which you are using the standard
procedure under Rev. Proc. 2004-53 or
• An acquisition that is not a statutory merger or
consolidation and that does not qualify under the
predecessor-successor rules. See Acquisitions that
Qualify Under Predecessor-Successor Rules, on page 2,
for a complete discussion of the predecessor-successor
rules.
Types of Mergers and Acquisitions
Mergers, acquisitions, and other reorganizations
generally fall into one of three categories for purposes of
reporting employment taxes.
• Statutory mergers and consolidations,
• Acquisitions that qualify under the
predecessor-successor rules (see Acquisitions that
Qualify Under Predecessor-Successor Rules on
page 2), or
• Other acquisitions that are not statutory mergers or
consolidations and that do not qualify under the
predecessor-successor rules (see Acquisitions that
Qualify Under the Predecessor-Successor Rules on
page 2).

Statutory Mergers and Consolidations
If you are the surviving corporation after a statutory
merger or consolidation, you should file Schedule D
(Form 941) to provide:
• The date of the statutory merger or consolidation;
• The name, trade name (doing business as or d/b/a),
address, and employer identification number (EIN) of the
acquired corporation; and
• An explanation of any discrepancies between Forms
W-2 (Copy A) and Forms 941 in the totals of social
security wages, Medicare wages and tips, social security
tips, federal income tax withheld, and advance EIC
payments.
If you are the acquired corporation after a statutory
merger or consolidation and you are filing a final Form
941, you should file Schedule D (Form 941) to provide:
• The date of the statutory merger or consolidation;
• The name, trade name (doing business as or d/b/a),
address, and EIN of the surviving corporation; and

Cat. No. 38789M

• An explanation of any discrepancies between Forms

If your business is not continuing to operate,, yyou
should file Schedule D (Form 941) with yourr final Form
d
941.

W-2 (Copy A) and Forms 941 in the totals of social
security wages, Medicare wages and tips, social security
tips, federal income tax withheld, and advance EIC
payments.
Rev. Rul. 62-60, 1962-1 C.B. 186, provides that, for
employment tax purposes, the “resultant” corporation
(now called a “surviving” corporation) resulting from a
statutory merger or consolidation is the same employer
and taxpayer as the “absorbed” corporation (now called
an “acquired” corporation). The predecessor-successor
rules described in Rev. Proc. 2004-53 do not apply to
these transactions.
However, Rev. Proc. 2004-53 provides for using
Schedule D (Form 941) by a surviving corporation or an
acquired corporation to report information after a
statutory merger or consolidation only where there is a
discrepancy. If the surviving corporation completes and
files Schedule D (Form 941) to explain discrepancies
between the totals on Forms W-2 (Copy A) and the totals
on Forms 941, filing Schedule D (Form 941) will also
provide notice of a statutory merger or consolidation
under Rev. Rul. 62-60.

For example, if the transaction occurred in the third
quarter of 2009 and your business is continuing to
operate, you would file Schedule D (Form 941) with your
Form 941 no later than the first quarter of 2010.
However, if your business is not continuing to operate
during 2009, you would file Schedule D (Form
941) with
(
your final Form 941
1 due the third quarter of 2009.

How Should You File?
Schedule D (Form 941) was designed to be filed
electronically (after March 31, 2006) with your electronic
submission of Form 941. Electronic filing of Schedule D
(Form 941) enables IRS to process information on the
form more efficiently and accurately.
However, you may file Schedule D (Form 941) on
paper if necessary. When filing on paper, do not attach
Schedule D (Form 941) to your Form 941. Instead, file
Schedule D (Form 941) separately using the following
address.

Acquisitions that Qualify Under
Predecessor-Successor Rules

IRS Philadelphia
p
Campus
P.O. Box 63241
Mail Stop
p N849
Philadelphia, PA 19114-8241
Do not use this address to file Form 941. See Where
Should You File? in the Instructions for Form 941 for the
filing address of Form 941.

Acquisitions that qualify under the
predecessor-successor rules are acquisitions in which a
successor employer:
• Acquires substantially all the property used in a trade
or business of another employer (predecessor) or in a
separate unit of a trade or business of a predecessor and
• In connection with and directly after the acquisition (but
during the same calendar year) employs individuals who
immediately before the acquisition were employed in the
trade or business of the predecessor.
These acquisitions satisfy the conditions for
predecessor-successor status set forth in section
3121(a)(1) of the Internal Revenue Code and section
31.3121(a)(1)-1(b) of the Employment Tax Regulations.
Rev. Proc. 2004-53 contains the rules that apply to
employment tax reporting in a predecessor-successor
situation. Two procedures can be used in an acquisition
that qualifies as a predecessor-successor situation.
• Standard procedure —Do not file Schedule D (Form
941). No discrepancies should exist between the totals of
the Forms W-2 (Copy A) and the totals of the Forms 941
as a result of the acquisition.
• Alternate procedure—Each party in the transaction
should file Schedule D (Form 941). Forms W-2 (Copy A)
filed by the successor may include amounts reported on
Forms 941 filed by the predecessor.

Specific Instructions
Completing Schedule D (Form 941)
Your Business Information
Carefully fill in your employer identification number (EIN),
name, trade name (doing business as or d/b/a), and
complete address at the top of the schedule.

!

CAUTION

Always be sure the EIN on the Schedule D (Form
941) you file exactly matches the EIN the IRS
assigned to your business.

Tax Year of Discrepancies
In the box at the top of the schedule, write the tax year
(not the quarter) in which the discrepancies occurred.
Write the tax year using four digits. For example,, if the
transaction occurred on March 22, 2009, write “2009”
2009” in
the box.

Other Acquisitions

Make sure you fill in the correct tax year so you can
reconcile the information appropriately. The tax year
must be the same as the calendar year you write in Part
1, line 2.

If you completed other acquisitions that are not statutory
mergers or consolidations and that do not qualify under
the predecessor-successor rules, no discrepancies
should exist as a result of the acquisition. Rev. Rul. 62-60
and Rev. Proc. 2004-53 do not apply to such
transactions. Do not file Schedule D (Form 941) for such
transactions.

Be sure to fill in your EIN, business name, other
TIP party’s EIN, and the tax year of the discrepancies
on the top of page 2 as well.

When Should You File?

Type of Submission

If your business is continuing
g to operate,
p
, you
y should file
Schedule D (Form 941) with your Form 941 no later than
the due date of your Form 941 for the first quarter of the
year after the calendar year of the transaction.

Check the appropriate box to show whether this form is
the “Original” Schedule D (Form 941) for a specific
transaction or corrects (mark “Corrected”) a Schedule D
(Form 941) you previously submitted.
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Part 3: Fill this part out ONLY if you
are filing more than one Schedule D
(Form 941) for any calendar year.

Part 1: Answer these background
questions.
1. Check the appropriate box to explain the type of
transaction for which you are submitting Schedule D
(Form 941). See Types of Mergers and Acquisitions on
page 1 for details.
File Schedule D (Form 941) after either:
a. A statutory merger or consolidation (Check whether
you are an acquired corporation or a surviving
corporation.), or
b. An acquisition for which you are using the alternate
procedure under Rev. Proc. 2004-53. (Check whether
you are a predecessor or a successor.)
2. Fill in the effective date of the transaction in the
box. Make sure you write the month, day, and year in this
format: MM/DD/YYYY. The year must be the same as the
calendar year you write in the box at the top of the
schedule.
3. Fill in the contact information about the OTHER
PARTY in the transaction by including the other party’s
EIN, name, trade name (doing business as or d/b/a),
complete address, and phone number. Verify the other
party’s EIN to make sure it is correct.

If you are filing only one Schedule D (Form 941) for the
calendar year, leave this part blank.
When more than one statutory merger, consolidation,
or acquisition occurs during a calendar year, file a
separate Schedule D (Form 941) for each transaction.
Complete Part 3 for each transaction. For instance, if you
have 11 different transactions in a calendar year, you
need to file 11 different Schedules D (Form 941). Part 2
would be the same for each schedule. Part 3 would show
one of the 11 transactions. For example, the amount
entered in Part 2 on line 4 for Column C should equal the
total of all 11 entries in Part 3 on line 10 for Column C.
9. Show the number of schedules you are filing for the
year and identify which schedule this is. For example, if
you had three different transactions in a calendar year
and you are filing a Schedule D (Form 941) to describe
the second transaction, fill in “2” and “3” so the sentence
reads: “This is schedule 2 of 3. ”
10-14. For purposes of Part 3, Columns A and B, the
term “employees affected by the transaction reported on
this Schedule D” means those employees who received
wages that were reported on Forms 941 filed by one
employer but whose wages were reported on Form W-2
(Copy A) filed by another employer as a result of this
particular transaction. Report the totals for social security
wages, Medicare wages and tips, social security tips,
federal income tax withheld, and advance earned income
credit (EIC) payments.
In Column A, fill in the amount you reported to the IRS
for the tax year for employees affected by the transaction
reported on this Schedule D (Form 941) for each of the
items. Add the totals from all your
Forms 941, as
y
corrected by any Forms 941-X, and write your answers
on the appropriate lines.
In Column B, fill in the amount you reported to SSA for
the tax year for employees affected by the transaction
reported on this Schedule D (Form 941) for each of the
items. Add the totals from all Forms W-2 (Copy A), as
corrected by any Forms W-2c (Copy A), and write your
answers on the appropriate lines.
Calculate the differences between the entries in the
columns:

Part 2: Tell us about the
discrepancies with your returns.
4-8. Gather your information about the social security
wages, Medicare wages and tips, social security tips,
federal income tax withheld, and advance earned income
credit (EIC) payments you reported. When entering
money amounts from your Forms 941 and W-2 (Copy A)
on lines 4 -14, you may round to the nearest dollar. Do
not show dollar signs but do use commas as appropriate.
Show an amount (even if it is zero) for each column of a
line.
In Column A, fill in the amount you reported to the IRS
for the tax year for each of the items. Add the totals from
all Forms 941,, as corrected by
y any
y Forms 941-X,,
Adjusted
j
Employer’s
p y
QUARTERLY Federal Tax Return
or Claim for Refund, and write your answers on the
appropriate lines.
In Column B, fill in the amount you reported to SSA for
each of the items. Add the totals from all Forms W-2
(Copy A), as corrected by any Forms W-2c, Corrected
Wage and Tax Statement (Copy A), and write your
answers on the appropriate lines.

Column A
– Column B
Column C

Calculate the differences between the entries in the
columns:

Enter any negative result in parentheses, if possible.
For example, if line 12, Column A is “-0-” and line 12,
Column B is “6,000,” write “(6,000)” in line 12, Column C.

Column A
– Column B
Column C

!

Enter any negative result in parentheses, if possible.
For example, if line 6, Column A is “-0-” and line 6,
Column B is “6,000,” write “(6,000)” in line 6, Column C.

!

CAUTION

CAUTION

If no Forms W-2 (Copy A) were filed by you, write
“-0-” in Column B, “Amount you reported to SSA
for the tax year.”

Paperwork Reduction Act Notice We ask for the
information on Schedule D (Form 941) to carry out the
Internal Revenue laws of the United States. You are
required to give us the information. We need it to ensure
you are complying with these laws and to allow us to
figure and collect the right amount of tax.

If no Forms W-2 (Copy A) were filed by you, write
“-0-” in column B, “Amount you reported to SSA
for the tax year.”

If you are filing for one transaction only, STOP here. If
you are filing for more than one transaction, go to Part 3.
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You are not required to provide the information
requested on a form that is subject to the Paperwork
Reduction Act unless the form displays a valid OMB
control number. Books or records relating to a form or its
instructions must be retained as long as their contents
may become material in the administration of any Internal
Revenue law. Generally, tax returns and return
information are confidential, as required by section 6103.
The time needed to complete and file Schedule D
(Form 941) will vary depending on individual
circumstances. The estimated average time is:
Recordkeeping, 11 hr., 43 min.; Learning about the
law or the form, 18 min.; Preparing, copying,

assembling, and sending the form to the IRS, 30 min.
If you have comments concerning the accuracy of this
time estimate or suggestions for making Schedule D
(Form 941) simpler, we would be happy to hear from you.
You can send comments by email to *[email protected]
or you can write to: Internal Revenue Service, Tax
Products Coordinating Committee,
SE:W:CAR:MP:T:T:SP, 1111 Constitution Ave. NW,
IR-6526,
-6526, Washington, DC 20224. Do not send Schedule
D (Form 941) to this address. Instead, see Where Should
You File? on page 2.

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