Certified professional employer organizations (CPEOs) enter into contracts with employers to be treated as the employer for employment tax purposes and are subject to IRS rules in order to qualify as CPEOs and maintain that status.
This article discusses who qualifies to take the credit, how to make the election, the calculation and allocation of the credit, and how to report it.
A successor law firm was given credit for the employment tax payments of its predecessor under the doctrine of equitable recoupment.
Employees should have overarching guidance for their global assignment that includes international assignment agreements.
Professional employer organizations (PEOs) provide comprehensive payroll, benefits, and human resource outsourcing solutions to unrelated third-party employers. PEOs are often also referred to as employee leasing companies or "co-employers." The model for providing those services, which has been relatively consistent for many decades, may change significantly because of recent legislation that will bifurcate PEOs into two categories.
IRS Disagrees With Tax Court on Ability to Designate Employment Tax Payments as Income Tax Withholding
The IRS announced in that it will not follow a Tax Court holding that an employer may designate payments of its employment taxes to the income taxes of specific employees.
With the passage of the Patient Protection and Affordable Care Act, which provided for an increase in the Medicare tax rate for certain high earners who are members of the ERISA "top hat" group, and recent discussions about the status of Social Security and Medicare funding, it is appropriate to review the rules in Sec. 3121(v)(2) governing FICA taxation.
Final regulations contain rules on the liability for employment taxes when an employer designates an agent under a “service agreement” to pay its employees and to satisfy its employment tax obligations instead of following normal IRS procedures to designate an agent.
Worker classification has been a major concern for many years. While it is clear that government agencies recognize that worker misclassification is a significant problem, how to classify workers remains unclear.
Determining proper classification of workers, either as independent contractors or employees, can be subjective and a challenge for employers.
When a corporation fails to remit the withheld taxes to the government, the IRS looks through the corporation to the individual or individuals who are responsible for the failure.
The IRS released proposed regulations under Sec. 3504 that would govern the liability for employment taxes when an employer designates an agent under a “service agreement” to pay its employees and to satisfy all employment tax obligations.
A number of technical questions are involved in determining status as an employer for federal employment tax purposes when a foreign business sends individuals to work in the United States.
This article reviews the common law principles and authoritative guidance available to distinguish when workers are employees and the Section 530 safe-harbor provisions.
This item examines the employment tax consequences related to a corporate change of control event. Those consequences generally depend on the type of event, namely whether there is an asset purchase, a merger, or a stock acquisition.
Correcting an employment tax error that is discovered in the year in which the error occurs is generally a simple process. However, employers often discover such errors after the close of the calendar year in which they paid the wages to an employee. The adjustment process to correct those errors is confusing and often leads to further mistakes.
In March 2008, the Federal Circuit reversed a decision of the Court of Federal Claims that the qualification of payments as supplemental unemployment benefits under Sec. 3402 required the payments to be treated as nonwages for FICA tax purposes.
As the IRS intensifies its scrutiny of worker classification, businesses may want to take a fresh look at how their policies, procedures, and documentation around engaging independent contractors might withstand IRS review.