BBB Offers Tips to Help Employers Choose
The recent reports that AccuPay, a payroll processing company in Bel Air, Maryland, may have diverted tax funds from hundreds of clients has many companies that use such services frantically checking their accounts. That’s not a bad thing, but it’s important to know what to look for when you do.
Payroll processing companies can save time and streamline often burdensome accounting tasks. But companies need to remember that just because the process of paying taxes has been outsourced, the responsibility for doing so has not been. That’s why it’s critical to find a reliable, trustworthy company to handle these services. Here are some tips to help you choose:
Make sure you receive copies of all IRS and state notices. Power of attorney forms provide the option to designate the payroll processing company only as the recipient of all notices, or to send duplicate copies to your offices also. Always choose the duplicates and designate someone to check them, either someone on staff or your accountant.
Do not change your address of record with the IRS to the payroll processing company’s address. Doing so could mean that you don’t receive notices, or don’t receive them in a timely manner, if there are any problems.
Make sure that you receive the EFTPS confirmation for every payment. Only use a payroll processing company that is using the Electronic Federal Tax Payment System (EFTPS). Every time a tax payment is made through this system, an EFTPS confirmation acknowledgement number is generated. If registered, you can log in to EFTPS online at www.EFTPS.gov and see a 16-month history of payments. You can also call EFTPS at 1-800-945-8400 to check the status of the payment using that number. Periodically call and confirm that the payments have been made.
Brian Pfeifer, COO of BBB Accredited Business, Payce told BBB, “We get an acknowledgement number every time we pay the taxes for a client...We want our clients to have this information with every payroll statement..." Pfeifer adds, “There is no greater security than calling the government and confirming that your payment has been made.”
Treat any late or missed payment notice extremely seriously. If you receive a notice of a late or missed payment do not ignore it! Such notices are serious red flags and need immediate attention. Address the issue immediately with both the payroll processing company and the IRS.
The fact is that employers are solely responsible in the eyes of the IRS for tax payments. Even if payments were not made because of negligence, fraud or theft, that does not negate the employers obligation to pay the taxes. If you receive a bill or notice from the IRS that seems to indicate a problem with your payroll service company, immediately contact the IRS by calling the number on the bill, visiting a local IRS office or calling 800-829-4933.
Unpaid tax liabilities are a serious situation. The IRS can pursue not just a business for payment, but anyone designated a “responsible person” which means every officer of the business and non-officers with signature authority. In some cases the IRS can assess a Trust Fund Recovery Assessment as well, a 100% penalty, against every “responsible person” and claiming ignorance is not an acceptable defense. The courts have backed the IRS on this, making it even more important for business owners and officers to do their due diligence to avoid problems with tax payments.
For a list of BBB Accredited payroll firms, check our Accredited Business Directory and Start With Trust®!