Payroll Service Providers and Fraud

Internal Revenue Service has a listing of payroll service provider companies that have passed that have passed the IRS Assurance Testing System and or the Business Accpetance Testing requirements for Software Developers, Reporting Agents, and Transmitters of electronic business returns. See IRS website at: www.irs.gov and enter on Search "Payroll Service Provider".

As a business owner, officer, member or payroll department employee. It is imperative that all payroll records, verification with compliance of filing and paying be maintained in case there is a problem.

Many times we have read stories and seen cases in which companies rely on payroll service providers to prepare, file and pay the payroll taxes for a company. Yet, if you google payroll fraud. You can read about many instances in which companies face the wrath of the Internal Revenue Service for non-filing, and non payment of federal tax deposits. In addition, State payroll tax problems are also encountered.

All these tax issues can be prevented or addressed if due dilingence is taken a step further by verifying with the tax agency that the quarterly payroll tax returns have been filed and paid accordingly. How? Monthly request a copy of the account transcript to verify payroll tax deposits have been paid. In addition, every quarter one month after the payroll tax return has been filed. Request a copy of the transcript and verify that the payroll tax return for the prior quarter has been filed and fully paid.

Keep the copy of all quarterly transcripts with your quarterly payroll tax records as evidence that you have conducted your own due diligence in making sure payroll tax filing requirements and paying requirements are completed by the Payroll Service company you have contracted to perform on your behalf.

The process of requesting account transcripts, verifying and keeping records can also be utlized to address any payroll processing issues with internal company employees who have this responsibility.

You can prevent and avoid payroll fraud with tax agency records.

Ultimately, it is the company that has employees who is held responsible for any problems with non reporting of payroll and non payment of taxes. Do not fall prey to payroll tax problems or fraud.

For any questions, additional information or advice on payroll issues go to my

website: http://www.advocatetaxgroup.com

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