New Rules for Reporting Agents and Payroll Tax Returns

Post Date: 8/24/12
Last Updated: 8/24/12

Summary

Cross References
• Rev. Proc. 2012-32
• Rev. Proc. 2012-33
• Form 8655, Reporting Agent Authorization
• IRS Pub. 1474, Technical Specifications Guide for Reporting Agent Authorization and Federal Tax Depositors

Prior to 2011, employers could make deposits of federal payroll taxes using Form 8109, Federal Tax Deposit Coupon, at a financial institution (such as a bank) that was an authorized depositary for federal taxes. Effective January 1, 2011, all taxpayers must use the Electronic Federal Tax Payment System (EFTPS) to make federal tax deposits. Employers with a deposit liability of less than $2,500 for the return period may still remit employment taxes with the tax return (rather than submit the payment through EFTPS).

New rule for reporting agents. A reporting agent is an accounting service, franchiser, bank, service bureau, or other entity authorized to file and sign Forms 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return, and Form 941, Employer’s Quarterly Federal Tax Return, and a number of other related payroll tax returns listed in Revenue Procedure 2012-32. An employer can authorize a reporting agent to sign and file these payroll tax returns on behalf of the employer by filing Form 8655, Reporting Agent Authorization.

Under the new rules, whenever a reporting agent remits federal tax deposits (FTDs) or federal tax payments (FTPs) on behalf of the employer, the reporting agent must use EFTPS to do so, regardless of whether the employer is otherwise required to use EFTPS. The reporting agent may also use the Federal Tax Application (FTA) system in remitting FTDs or FTPs on behalf of the employer.

Since an employer enrolled in the EFTPS can view FTDs and FTPs made on its behalf by reporting agents, an employer will be able to verify that a reporting agent has, in a timely manner, made those FTDs and FTPs.

See Revenue Procedures 2012-32 and 2012-33 for more information on what reporting agents are authorized to do on behalf of employers.
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