I'm helping a friend put the pieces of her non-profit back together after her partner quit and left her with an absolute mess of paperwork and probably some financial sabotage. We just got off the phone with the IRS and it looks like they're missing several 940 filings from the business. Her payroll service took care of the 941s and those appear to be current, but I will need to go through the records and see if there's any correspondence in this timeframe to see why the 940s weren't done.
Should the payroll service have been submitting these along with the other returns? If not, how do they get filed typically?
What documents go into completing the 940?
She's now a business of one and I've been volunteering my time to clean it up and get her back on track. I'm not a CPA or trained in anything other than being well-organized so I'm learning all of this as I go.
Edit: I read this from the 940 instructions.
For Tax-Exempt Organizations . . . Religious, educational, scientific, charitable, and other organizations described in section 501(c)(3) and exempt from tax under section 501(a) generally aren't subject to FUTA tax. However, a section 501(c)(3) organization is subject to FUTA tax when paying wages to employees on behalf of a non-section 501(c)(3) organization (for example, a section 501(c)(3) organization paying wages to employees of a related non-section 501(c)(3) organization, a section 501(c)(3) organization that is a section 3504 agent paying wages on behalf of a non-section 501(c)(3) organization, a section 501(c)(3) organization that is a common paymaster paying wages on behalf of a non-section 501(c)(3) organization, etc.).
It makes me think she didn't need to file (she's been a 501(c)(3) since 2016), but then I have to wonder why the IRS has 940s on record from them for the last couple years.
