Outsourcing payroll tasks can be a sound organization practice, however ... Know your tax duties as an employer

Many employers outsource some or all their payroll and associated tax duties to third-party payroll company. Third-party payroll service companies can enhance business operations and help satisfy filing deadlines and deposit requirements. Some of the services they provide are:

- Administering payroll and work taxes on behalf of the employer where the company provides the funds at first to the third-party.

• Reporting, gathering and transferring work taxes with state and federal authorities.
  
  Employers who outsource some or all their payroll responsibilities need to think about the following:
  
  - The company is ultimately accountable for the deposit and payment of federal tax liabilities. Even though the company might forward the tax totals up to the third-party to make the tax deposits, the company is the accountable celebration. If the third-party fails to make the federal tax payments, then the IRS might evaluate penalties and interest on the company's account. The company is accountable for all taxes, charges and interest due. The company may also be held personally accountable for certain overdue federal taxes.
• If there are any problems with an account, then the IRS will send out correspondence to the company at the address of record. The IRS strongly recommends that the company does not alter their address of record to that of the payroll provider as it might substantially limit the employer's ability to be informed of tax matters including their company.
• Electronic Funds Transfer (EFT) should be used to deposit all federal tax deposits. Generally, an EFT is used Electronic Federal Tax Payment System (EFTPS). Employers should guarantee their payroll service providers are using EFTPS, so the companies can confirm that payments are being made on their behalf. Employers need to register on the EFTPS system to get their own PIN and utilize this PIN to regularly confirm payments. A red flag ought to increase the very first time a provider misses out on a payment or makes a late payment. When a company signs up on EFTPS they will have on-line access to their payment history for 16 months. In addition, EFTPS enables companies to make any extra tax payments that their third-party supplier is not making on their behalf such as approximated tax payments. There have been prosecutions of individuals and business, who acting under the appearance of a payroll company, have actually taken funds meant for payment of work taxes.
  
  EFTPS is a protected, precise, and easy to utilize service that provides an immediate verification for each transaction. This service is offered free of charge from the U.S. Department of Treasury and permits companies to make and confirm federal tax payments electronically 24 hours a day, 7 days a week through the web or by phone. For more details, can enlist online at EFTPS.gov or call EFTPS Customer Service at 800-555-4477 for a registration form or to consult with a client service representative.
  
  Remember, employers are eventually responsible for the payment of income tax kept and of both the company and staff member portions of social security and Medicare taxes.
  
  Employers who think that a bill or notice received is a result of a problem with their payroll provider need to call the IRS as soon as possible by calling the number on the bill, writing to the IRS office that sent out the expense, calling 800-829-4933 or going to a regional IRS office. To find out more about IRS notifications, expenses and payment choices, refer to Publication 594, The IRS Collection Process PDF.