|May 15, 2014|
Previously published on May 8, 2014
On May 7th, 2014 the Internal Revenue Service issued an "e-News for Small Businesses" bulletin about Outsourcing Payroll Duties.
Under federal tax law, if a "third-party fails to make the federal tax payments, the IRS may assess penalties and interest on the employer’s account. The employer is liable for all taxes, penalties and interest due."
However, regulators want professionals to know that there is a new layer of protection from nefarious activity of payroll employees and vendors.
As of this year, clients of payroll service providers can obtain “Inquiry PINs” by registering on EFTPS (Electronic Federal Tax Payment System) which will allow the client/employer to monitor tax transactions made on their behalf.
To illustrate the prevalence of employment tax fraud investigations, the IRS published Examples of Employment Tax Fraud Investigations - Fiscal Year 2014.
For more information, visit EFTPS.gov.