Payroll Fraud: Outsourced or Not, Employers Liable

The CEO and Comptroller of Ingentra, a NY based payroll company, were recently charged with defrauding Sacramento County of tens of millions of dollars.

Ingentra was responsible for paying income tax withheld from employees to the IRS, court filing states and filing the county’s federal tax form. The two allegedly filed a tax form that didn’t reflect accurate employee tax withholdings.

Sacramento County will be footing the tax bill. 

The moral of the story?  Outsourcing doesn’t equal “not liable.”  The American Payroll Association summed it up nicely in an issue of Payroll Currently.

Employers need to remember that they are ultimately responsible for the deposit of federal payroll tax liabilities.  Even if a third-party service provider is making the deposits, the employer is the responsible party.  If the deposits are not made, the employer is liable for all taxes, penalties, and interest due.

-APA, Payroll Currently, Volume 18, Issue #11


Outsourced payroll may seem like the simple solution, but employers remain liable for stolen taxes. Outsourced or in-house, make sure you’re informed and plugged in on all things payroll - especially when it comes to taxes and your business.

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