IRS Notice on Third Party Payroll Payments

According to an IRS notice released in 2014, third parties that directly pay another entity’s payrolls can be held liable for the full amount of taxes required to be withheld but not paid to the government, subject to a 25% limitation.  An employer should file Form 4219, Statement of Liability of Lender, Surety or Other Person for Withholding Tax with the IRS for every quarter where such a liability is incurred to notify the IRS that a third party is paying or supplying wages to employees.
 
Remember, it is ultimately you, not the third party, that is held responsible for ensuring all taxes are paid. With an in house system, like Optimum Solutions, you have control of who pays and when your taxes are paid. Watch a free software demo today to learn more!

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Manager of Financial Services Teg Lantz, Lancaster Glass Corporation

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