How do you notify IRS you no longer have an employee?

To notify the IRS that you no longer have an employee, you should complete and file Form 941, Employer's Quarterly Federal Tax Return, for the quarter in which the employee left. You must report their last wages and indicate that they are no longer employed. Additionally, ensure that you provide any necessary final wage information on their Form W-2 at the end of the year. It's also advisable to keep records of the notification for your files.