Employers should choose their payroll service provider carefully to protect against fraud
When hiring a company to handle payroll and payroll tax, employers should carefully choose their payroll service provider. This can help a business avoid missed deposits for employment taxes and other unpaid bills.
Most of these businesses provide quality service but there are some who don't have their clients' best interests in mind. Each year, there are a few payroll service providers who don't submit their client's payroll taxes and closedown abruptly. The damage hits their unsuspecting clients hard.
Typically, these clients remain legally responsible for paying the taxes due, even if the employer sent funds to the payroll service provider for required deposits or payments.
Employers need to understand their payroll and employment tax responsibilities and choose a trusted payroll service. Here are a couple options:
IRS encourages employers to enroll in EFTPS and make sure its payroll service provider uses EFTPS to make tax deposits. It's free and it gives employers safe and easy online access to their payment history when deposits are made under their Employer Identification Number, enabling them to monitor whether their payroll service provider is meeting its tax deposit responsibilities.
Employers should contact the IRS about any bills or notices received, especially payments managed by a third party. Call the number on the bill, write to the IRS office that sent the bill, or contact the IRS business tax hotline at 800-829-4933.
IRS Tax Tips | 07/19/2021