What CP 236 is
Issued on Forms 941, CT-1, 943, 944 and 945 when a taxpayer's deposit frequency changed to semiweekly and no deposit posted in the first month. Its presence on the account (TC 971 AC 329) means a later claim of reasonable cause for not knowing the frequency changed "must be denied" (IRM 20.1.4.26.2(5)-(7)).
Where this sits: these notices come from the Form 945 side of the house, the return on which backup withholding is reported and deposited. The Form 945 page covers the account mechanics behind them.
The deadline
Informational; the deposits it refers to are already due.
What to do
Confirm your lookback and deposit under the semiweekly rule immediately; the first penalty after a frequency change is abated on request (IRM 20.1.4.26.2(2)).
The semiweekly rule the notice is reminding you of
A payer becomes a semiweekly depositor when the total tax on its lookback-period Form 945 (the second preceding calendar year) exceeds $50,000. The schedule is set by the day the withholding happened: tax withheld on a Wednesday, Thursday or Friday is due by the following Wednesday, and tax withheld on Saturday through Tuesday is due by the following Friday. Deposits go through EFTPS, and the return for a semiweekly depositor must carry a Form 945-A showing the liability by day. The IRS issues the new schedule in a CP136 each autumn; CP 236 is the follow-up that goes out when the first month under the new schedule passes with no deposit posted, on the theory that the payer is still depositing monthly and has not noticed the change.
Why the notice matters later
The CP 236 is recorded on the account as a transaction code, and that record has a specific consequence in the penalty rules. A payer who later asks for the failure-to-deposit penalty to be removed on the ground that it did not know its deposit frequency had changed will be denied if a CP 236 was issued; the manual treats the notice as proof that the payer was told. Separately, the first failure-to-deposit penalty after a change in deposit frequency is abated on request as a matter of policy, whether or not the payer has a reasonable-cause story. Ask for that abatement by letter or phone when the penalty notice arrives, and correct the deposit schedule at once. The deposit penalty calculator computes the exposure; the Form 945 page covers the account mechanics behind a frequency change.
Questions about CP 236
Who receives CP 236?
Payer. Issued on Forms 941, CT-1, 943, 944 and 945 when a taxpayer's deposit frequency changed to semiweekly and no deposit posted in the first month.
What is the deadline on CP 236?
Informational; the deposits it refers to are already due.
What should I do when CP 236 arrives?
Confirm your lookback and deposit under the semiweekly rule immediately; the first penalty after a frequency change is abated on request (IRM 20.1.4.26.2(2)).
Is CP 236 about my own income tax?
No. This decoder covers information reporting and withholding: the notices a payer, filer or payee sees because of Forms 1099, W-2, 945 and the TINs on them. Individual income-tax notices follow a different track.
Have a different notice? The IRS notice decoder lists all 77 in the order they tend to arrive.