Do you outsource your company’s payroll duties to a third party? If so, you are still legally responsible for the failure of such duties, even if the third party oversees your employment tax withholding, reporting, and payment obligations. Unfortunately, some payroll providers fail to comply with the IRS filing and deposit requirements and end up leaving the employer on the hook for substantial sums of money.
If you have a third party arrangement with a Payroll Service Provider (PSP), Reporting Agent (RAF), Section 3504 Agent, or Certified Professional Employer Organization (CPEO), you need to consider the following tips:
- When a third party enrolls your company in the Electronic Federal Tax Payment System (EFTPS), you will be given an Inquiry PIN. Make sure you immediately activate this PIN so you can check to see if the EFTPS payments have been made on time.
- If a third party only handles a portion of your payroll duties, you will have to enroll in EFTPS on your own to make the remaining payments.
- You should enroll in EFTPS separately, even if a third party handles your entire payroll obligations. Doing so will give you flexibility if you need to change payroll companies. You will also receive important notifications about your account if you in enroll in EFTPS separately.
Do you believe a third party has mismanaged your company’s payroll duties? You can file a complaint using Form 14157 to report fraudulent activity to the IRS. At The Carver Law Office, PLLC we are committed to representing clients in their tax matters, no matter how complicated they may be. Under the Trust Fund Recovery Penalty Statute, business owners can face serious consequences if they are found guilty of tax violations, which is why you should consult with our team to discuss all of your legal options.
Give us a call today at (405) 256-2619 to schedule your case consultation with a member of our law firm.