It is always wise to know your responsibility in any partnership. Outsourcing major management components of a business has become a very cost efficient way for employers to stay afloat in our our turbulent economy. Most companies outsource their payroll duties to third-party service providers which with all intents & purposes does streamline business operations; however recent prosecutions of individuals and companies who - acting under the guise of a payroll service provider - have (sometimes unknowingly) stolen funds intended for payment of employment taxes, making it even more so important that employers who outsource payroll are aware of the following three tips from the IRS:
- Employer Responsibility The employer is ultimately responsible for the deposit and payment of federal tax liabilities. Even though you forward the tax payments to the third party to make the tax deposits, you - the employer - are the responsible party.
If the third party fails to make the federal tax payments, the IRS may assess penalties and interest. The employer is liable for all taxes, penalties and interest due. The IRS can also hold you personally liable for certain unpaid federal taxes. Communication is key!When in doubt - ask questions. Your Accounting Service Professionals are is there to work with you not against you.
- Correspondence If there are any issues with an account, the IRS will send correspondence to the address of record. The IRS strongly suggests you do not change the address of record to that of the payroll service provider. That could limit your ability to stay informed of tax matters involving your business.
- EFTPS Choose a payroll service provider that uses the Electronic Federal Tax Payment System. You can register on the EFTPS system to get your own PIN to verify the payments.
Keeping you in the loop! Envision Tax & Accounting of Florida |
