1. Introduction: What is Form 15108?

IRS Form 15108, officially titled Correction to Your Federal Tax Deposit (FTD), is an administrative response document published by the Internal Revenue Service (IRS). It is governed by the Small Business/Self-Employed (SB/SE) and Wage and Investment Divisions of the IRS.

This form is not a standard tax return that businesses file on a recurring schedule. Instead, it is sent by the IRS as an enclosure with Notice CP108 when an employer or business makes a federal tax payment—most commonly through the Electronic Federal Tax Payment System (EFTPS) or by electronic funds transfer—and the IRS cannot determine which tax form or tax period the payment belongs to. Form 15108 serves as the taxpayer’s official instruction sheet telling the IRS where to credit the money.

2. Purpose of the Form: Why Does Form 15108 Exist?

Employers and corporate entities are required to make regular federal tax deposits for employment taxes (Form 941), annual federal unemployment taxes (Form 940), and corporate income taxes (Form 1120). When scheduling payments on EFTPS or remitting funds through commercial banks, payroll managers or business owners sometimes make simple administrative errors—such as selecting the wrong calendar quarter, choosing the wrong tax form, or entering an incorrect tax year.

When payment details are incomplete or ambiguous, the IRS computer system either holds the funds in an unclassified account or automatically applies them to an open balance on another form. Form 15108 exists to resolve this payment confusion and protect businesses:

Directing Misapplied Funds: It provides a simple mechanism for the taxpayer to instruct the IRS to transfer the payment to the exact tax form and tax period intended.
Preserving Original Deposit Dates: When the IRS reallocates a payment based on Form 15108, the payment keeps its original payment date, ensuring you receive full credit as of the day the money left your bank.
Eliminating Failure to Deposit Penalties: If a payroll deposit is credited to the wrong quarter, the intended quarter shows an unpaid balance, triggering automated IRS penalties. Form 15108 resolves the shortfall and eliminates erroneous penalties.

3. Who Needs to File This Form?

Form 15108 is an inquiry-driven document that you only complete if the IRS contacts you about an unassigned or misapplied payment. You need to complete and return Form 15108 if:

You or your business received IRS Notice CP108 stating that the IRS received a recent payment but cannot determine the correct tax period or tax form to apply it to.
Notice CP108 informs you that the IRS applied your payment to a specific tax form or period (such as Form 940 for the first quarter), and that application is incorrect.
You scheduled a payment on EFTPS and accidentally selected the wrong quarter (e.g., choosing Q1 instead of Q3) or wrong form (e.g., Form 940 instead of Form 941).
You are a corporate officer, payroll manager, or authorized accountant responding on behalf of the business.

4. Who Is Exempt / Not Required to File?

Many taxpayers who receive Notice CP108 do not actually need to submit Form 15108:

Taxpayers Agreeing with the IRS Placement: Notice CP108 explicitly states: “If we applied the payment correctly, you don’t need to do anything.” If the IRS’s default placement matches where you wanted the money to go, you are exempt from filing.
Taxpayers Resolving the Issue by Phone: Notice CP108 permits taxpayers to resolve the misapplied deposit over the telephone. If you call the IRS customer service number listed on the notice and reallocate the payment verbally, you do not need to mail Form 15108.
Compliant Taxpayers: Businesses whose electronic payments and quarterly tax returns match without discrepancy never receive Notice CP108 or Form 15108.
General Individual Taxpayers: Wage earners who do not make federal business tax deposits have no reason to use this form.

5. When to File: Deadlines and Frequency

Form 15108 is an event-based response document rather than an annual recurring filing. It carries a short response window specified on the accompanying notice.

Notice CP108 requests that taxpayers call or return Form 15108 within 10 calendar days from the date of the notice. Meeting this 10-day window is highly recommended: if you do not respond, the IRS will leave the payment in the default tax period. If that default placement leaves another tax quarter unpaid, automated IRS systems will begin generating late-deposit penalty notices. If you cannot mail the form immediately, calling the IRS within the 10-day window ensures the payment is moved before penalty notices are printed.

6. Where and How to File

Form 15108 cannot be submitted through retail tax preparation software. Taxpayers have two primary ways to resolve the issue:

Submission by Mail: Complete and sign the paper Form 15108, attach the response stub from Notice CP108, and mail it using the return envelope provided with your notice.
Mailing Address: If you misplaced the return envelope, mail Form 15108 to the designated IRS address as per instructions printed at the top of your Notice CP108 (typically an IRS Processing Center in Cincinnati, Ohio; Ogden, Utah; or Kansas City, Missouri). Always send via certified mail with tracking.
Telephone Alternative: You can call the direct toll-free customer service number printed on your Notice CP108 (800-829-0115 for businesses) to provide the reallocation instructions verbally to an IRS representative.

7. Step-by-Step Instructions to Fill Form 15108

Form 15108 is a concise, single-page correction document. It captures your business identification, contact telephone numbers, and precise payment reallocation instructions. The table below outlines each section of the form.

Section	Item Name	Required Information & Instructions
Header	Contact Information	Legal name, Employer Identification Number (EIN) or SSN, current address, city, state, and ZIP.
Address Box	Address Change Check	Check the box if your business mailing address has changed since your last filing.
Contact Info	Telephone Numbers	Primary and secondary daytime phone numbers, indicating best time to call (a.m. or p.m.).
Payment Block	Payment Verification	Exact dollar amount of the payment and the calendar date the payment was remitted.
Target Form	Tax Form Number	The specific tax return form number where the payment belongs (e.g., Form 941, Form 940, Form 1120).
Target Period	Tax Period Ending	The exact calendar date the tax period ended (MM/DD/YYYY, e.g., 03/31/2024, 09/30/2024).

Part 1: Business and Contact Information

Enter the complete legal business name exactly as registered with the IRS. Provide your nine-digit Employer Identification Number (EIN) or Social Security Number (SSN). Enter your current mailing address; if your company has moved, make the changes directly on the form to update IRS records. Provide primary and secondary telephone numbers and check whether morning or afternoon is the best time to reach you.

Part 2: Identifying the Misapplied Payment

Locate the payment details on your Notice CP108. Enter the exact dollar amount of the payment in question and the calendar date the funds were originally remitted or debited from your bank account. Providing the exact dollar amount ensures the IRS locates the specific unclassified transaction in its master ledger.

Part 3: Designating the Correct Form and Period

This is the core corrective action on Form 15108:

Form Number: Enter the specific federal tax form where the payment was intended to go (for example, Form 941 for quarterly employment taxes, Form 940 for federal unemployment, or Form 1120 for corporate income tax).
Tax Period Ending: Enter the exact calendar date on which the targeted tax period ended. For quarterly Form 941 returns, this must be March 31, June 30, September 30, or December 31 of the applicable year. For annual returns like Form 940, enter December 31.

8. Required Documents and Information Needed Before Filling

Before preparing Form 15108, gather the following payment and accounting records:

The original Notice CP108 received from the IRS (including the response stub).
Your Electronic Federal Tax Payment System (EFTPS) payment confirmation number or bank debit statement verifying the date and amount paid.
The payroll tax return (Form 941) or annual return (Form 940) showing the liability that remains unpaid.
Your company’s primary Employer Identification Number (EIN).
A signed Form 2848 (Power of Attorney) if an external accountant or payroll provider is handling the inquiry.

9. Common Mistakes to Avoid

Mishandling Notice CP108 can turn a simple misdirected payment into an unexpected penalty notice. Watch out for these frequent mistakes:

Ignoring the Notice When Placement Is Wrong: If the IRS placed the payment in the wrong quarter or form, ignoring Notice CP108 means the funds stay there. The quarter that actually needed the funds will show an underpayment, generating automated penalties.
Entering the Due Date Instead of the Period-Ending Date: In the tax period box, enter the date the period ended (such as 06/30/2024 for Q2), not the date the tax return was due (such as 07/31/2024).
Confusing Form 940 and Form 941: Selecting Form 940 (unemployment) instead of Form 941 (payroll withholding and FICA) is the most common reason payments are misapplied. Double-check your form numbers before submitting.
Mailing Without the CP108 Notice Stub: Omitting the detachable response stub from Notice CP108 delays processing because mail clerks must manually search for your case.
Making a Duplicate Payment: Do not immediately make a second payment on EFTPS before attempting to reallocate the first payment. Moving the existing payment avoids tying up company cash.

10. Penalties for Non-Filing or Errors

While Form 15108 itself does not carry direct filing fines, failing to correct a misapplied payment leads to cascading tax penalties on the unpaid account:

Failure-to-Deposit Penalties (IRC Section 6656): If your payment was misapplied to an inactive period, the quarter where the money belonged will trigger statutory penalties ranging from 2% to 15% of the unpaid deposit.
Failure-to-Pay Penalties (IRC Section 6651): If the error remains uncorrected past the filing deadline, the IRS assesses a late-payment penalty of 0.5% per month (up to 25%) on the perceived unpaid tax.
Compounding Statutory Interest: Unpaid tax liabilities accrue mandatory interest from the original payment due date until the deposit is reallocated.
Penalty Abatement Relief: Submitting Form 15108 cures the issue because the IRS reallocates the payment with its original deposit date, automatically wiping out any failure-to-deposit penalties that were generated in error.

11. Related Forms or Schedules

Form 15108 operates within a specialized collection of federal tax deposit and employment tax forms:

Notice CP108: Notice of Problem Payment / Federal Tax Deposit (the letter that encloses Form 15108).
Form 941: Employer’s Quarterly Federal Tax Return.
Form 941-X: Adjusted Employer’s Quarterly Federal Tax Return or Claim for Refund.
Form 940: Employer’s Annual Federal Unemployment (FUTA) Tax Return.
Form 1120: U.S. Corporation Income Tax Return.
Form 2848: Power of Attorney and Declaration of Representative.

12. Frequently Asked Questions (FAQs)

1. What is IRS Notice CP108?

Notice CP108 is a notification sent by the IRS when they receive a federal tax deposit but cannot determine the correct tax period or form to credit, or when they applied the payment to a default period and need you to verify if that placement is correct.

2. Can I resolve Form 15108 over the phone?

Yes. The IRS permits employers to handle Notice CP108 by telephone. Calling the business customer service number printed on your notice allows an agent to move the payment to the correct tax form and quarter immediately, avoiding mail delays.

3. Will my business be penalized if a deposit was applied to the wrong quarter?

If you correct the issue using Form 15108 or by phone, the IRS will transfer the payment to the correct quarter using the original date you paid. Any failure-to-deposit penalties that were assessed due to the mismatch will be reversed.

4. What should I do if the IRS applied my payment to the correct period?

If the tax form and tax period listed on Notice CP108 match where you wanted the payment applied, you do not need to do anything. You are exempt from returning Form 15108.

5. Can I use Form 15108 to request a refund of an overpayment?

No. Form 15108 is strictly used to direct or move a payment to a specific tax form and period. To claim a refund for an overpayment on a previously filed return, you must file an adjusted return such as Form 941-X.

6. How can our company prevent misapplied payments on EFTPS in the future?

Ensure payroll staff double-check the tax form (e.g., Form 941 vs. Form 940) and the tax period ending date before finalizing payments on EFTPS. Saving reusable payment templates for recurring payroll deposits helps eliminate manual entry errors.

13. Conclusion: Key Takeaways

IRS Form 15108 is an essential administrative tool that prevents simple payment scheduling errors from turning into costly tax penalties. When the IRS sends Notice CP108, returning Form 15108—or resolving the issue over the phone—ensures your federal tax deposit is credited to the correct tax form and calendar quarter.

Because failing to correct a misapplied deposit leaves another tax quarter showing an unpaid balance, business owners and payroll managers should act within the 10-day notice window, confirm bank payment records, and ensure funds are properly applied to protect the company from automated failure-to-deposit penalties.

IRS Form 15108 Guide: Federal Tax Deposit Correction Rules