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Sole proprietorship — The individual who owns the

penalty, you may be able to reduce the penalty. For more

information, see the instructions for Form 945-A.

business.

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Corporation (including a limited liability company (LLC)

Part 4: Explain Your Corrections for This

treated as a corporation) — The president, vice president, or

other principal officer duly authorized to sign.

Year

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Partnership (including an LLC treated as a partnership)

or unincorporated organization — A responsible and duly

authorized partner, member, or officer having knowledge of its

19. Correction of Both Underreported and

affairs.

Overreported Amounts

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Single member LLC treated as a disregarded entity for

Check the box on line 19 if any corrections you entered on lines

federal income tax purposes — The owner of the LLC or a

6a through 17b in column 3 reflect both underreported and

principal officer duly authorized to sign.

overreported amounts.

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Trust or estate — The fiduciary.

Example. If you had an increase to Tier I Employer

A duly authorized agent of the taxpayer also may sign Form

compensation of $15,000 for employee A and a decrease to

CT-1 X if a valid power of attorney has been filed.

Tier I Employer compensation of $5,000 for employee B, you

Alternative signature method. Corporate officers or duly

would enter $10,000 on line 6a, column 3. That $10,000

authorized agents may sign Form CT-1 X by rubber stamp,

represents the net change resulting from corrections.

mechanical device, or computer software program. For details

On line 21, you must explain the reason for both the $15,000

and required documentation, see Rev. Proc. 2005-39, 2005-28

increase and the $5,000 decrease.

I.R.B. 82, available at

20. Did You Reclassify Any Workers?

Paid Preparer Use Only

Check the box on line 20 if you reclassified any workers to be

A paid preparer must sign Form CT-1 X and provide the

independent contractors or nonemployees. Also check this box

information in the Paid preparer use only section of Part 5 if the

if the IRS (or you) determined that workers you treated as

preparer was paid to prepare Form CT-1 X and is not an

independent contractors or nonemployees should be classified

employee of the filing entity. Paid preparers must sign paper

as employees. On line 21, provide a detailed reason why any

returns with a manual signature. The preparer must give the

worker was reclassified.

employer the return to file with the IRS and include a copy of

the return for the employer’s records.

Return not filed because you did not treat any workers as

employees. If you did not previously file Form CT-1 because

If you are a paid preparer, write your Preparer Tax

you mistakenly treated all workers as independent contractors

Identification Number (PTIN) in the space provided. Include

or as nonemployees, file a Form CT-1 for each delinquent year.

your complete address. If you work for a firm, write the firm’s

name and the EIN of the firm. You can apply for a PTIN using

Write “Misclassified Employees” in dark, bold letters across

Form W-12, IRS Paid Preparer Tax Identification Number

the top margin of page 1 of each Form CT-1. Complete Form

(PTIN) Application and Renewal. You cannot use your PTIN in

CT-1 using the Instructions for Form CT-1. Attach a Form

place of the EIN of the tax preparation firm.

CT-1 X to each Form CT-1. Complete the top of Form CT-1 X,

including the date you discovered the error, and provide a

Generally, you are not required to complete this section if

detailed explanation on line 21.

you are filing the return as a reporting agent and have a valid

Form 8655, Reporting Agent Authorization, on file with the IRS.

21. Explain Your Corrections

However, a reporting agent must complete this section if the

Treasury regulations require you to explain in detail the grounds

reporting agent offered legal advice, for example, advising the

and facts relied upon to support each correction. On line 21,

client on determining whether its workers are employees or

describe in detail each correction you entered in column 4 on

independent contractors for federal tax purposes.

lines 6a through 17b. If you need more space, attach additional

sheets, but be sure to write your name, EIN, and calendar year

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on the top of each sheet.

You must describe the events that caused the underreported

Publications from the IRS?

or overreported amounts. Explanations such as “RRTA

compensation was overstated” or “administrative/payroll errors

were discovered” are insufficient and may delay the processing

Call the IRS at 1-800-829-3676.

of your Form CT-1 X because the IRS may need to ask for a

more complete explanation.

The following is the information we need in your explanation

Visit the IRS website at

for each error you are correcting.

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Form CT-1 X line number(s) affected.

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Date you discovered the error.

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Difference (amount of the error).

Additional Information

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Cause of the error.

You may report the information in paragraph form. The

You may find the following products helpful when using Form

following paragraph is an example.

CT-1 X.

“The $1,000 difference shown in column 3 of lines 6a and 7

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Form W-2, Wage and Tax Statement

was discovered on May 14, 2012, during an internal payroll

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Form W-3, Transmittal of Wage and Tax Statements

audit. We discovered that we included $1,000 of compensation

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Instructions for Forms W-2 and W-3

for one of our employees twice. This correction removes the

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Form W-2c, Corrected Wage and Tax Statement

reported compensation that was never paid.”

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Form W-3c, Transmittal of Corrected Wage and Tax

Statements

Part 5: Sign Here

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Instructions for Forms W-2c and W-3c**

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Form 945-A, Annual Record of Federal Tax Liability

You must complete all three pages of Form CT-1 X and sign it

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Form W-11, Hiring Incentives to Restore Employment (HIRE)

on page 3. If you do not sign, the processing of Form CT-1 X

Act Employee Affidavit

will be delayed.

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Form W-12, IRS Paid Preparer Tax Identification Number

Who must sign the Form CT-1 X? Form CT-1 X must be

(PTIN) Application and Renewal

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signed by one of the following:

Instructions for Form CT-1

-9-

Instructions for Form CT-1 X (2012)

Instructions For Form Ct-1 X - Adjusted Employer'S Annual Railroad Retirement Tax Return Or Claim For Refund Page 10

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