All About Federal State Local Employment Tax
  • January 17, 2023
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Employers must adhere to several obligations under the Tax Code, one of which is timely compliance with various taxation protocols such as calculating taxes to be filed and making appropriate deductions from employees’ paychecks, filing tax returns, and making timely payments. One such tax is the Federal State Local Employment tax (FSLET). When it comes to federal taxes, timely filing & paying, and maintaining transparency with the IRS are the best way to attain full compliance. Any discrepancies can lead to an IRS tax investigation. Continuing on the topic, let’s look at a comprehensive guide to FSLET.

Which type of cases qualify for FSLET?

Federal State Local Employment tax is a type of payroll tax that accounts for 15.3% of an individual’s wages and is paid 50% by the employer and the rest by the employee. There are two types of cases that qualify for FSLET. These are:

Compliance Checks

A compliance check is a verification process provisioned under “Title 26” of the Internal Revenue Code (IRC). It is conducted by the IRS and involves reviewing the tax returns filed and paid by the enterprise. A compliance check is neither an audit (provisioned under section 530 of the IRC Act of 1978) nor an investigation (section 7605(a) of the IRC). The objective of conducting a compliance check is to promote voluntary compliance and ensure that no discrepancies are left in filing forms. Blog Related Post: What is IRS Audit Reconsideration?


The term “examination” isn’t defined in the law books in the United States, however, it simply means a methodical evaluation of documents and financial records of the employer to determine exact tax liability. IRS officials, however, are not immune to committing mistakes, leading to discrepancies in the liability. This can easily escalate into an IRS tax investigation, a point at which it is advisable to hire a tax settlement attorney to help you prepare your case with the right documents and find an IRS tax problem solution.

Are there any consequences for refusing to submit to a compliance check?

As stated earlier, a compliance check is neither an audit nor an investigation, implying that the taxpayer may choose not to participate without incurring any penalty. The IRS, however, may proceed with a tax investigation. It is advisable to consult a tax resolution attorney to help you deal with the intricate legalities of an IRS tax investigation. Blog Related Post: All You Need to Know About Letters from the IRS

How frequently can the IRS conduct compliance checks?

The IRS can conduct compliance checks according to its requirement. Unlike examinations that are governed under Section 7605(b) of the IRC, there’s no limitation on “how” and “when” to conduct compliance checks.

Does the safe haven protection apply once a taxpayer has been checked for compliance?

The “safe-haven protection” immunizes taxpayers from audits under section 530 of the IRC Act of 1978, however, compliance checks aren’t audits, which is why taxpayers can be held liable under compliance checks whenever the IRS deems it fit. Partnering with an IRS tax attorney is the best way to get the desired IRS tax problems resolution, including dealing with compliance checks.

Final Word

Taxpayers can easily end up being caught in a criminal investigation as a result of compliance checks. This is where the Law Offices of Nick Nemeth steps in to provide a comprehensive IRS tax solution. We first familiarize with your case before preparing a strong case supported by the right documents to find the appropriate solution for your tax problems. To discuss your requirements and get answers to all your questions about IRS tax investigations, call (972) 426-2553 or fill out our contact form. You can also refer to our youtube channel for more information.
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