Outsourced payroll tax deposits; wrongful IRS levy or seizure claims

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Issue Number:  2018-26

Inside This Issue

1. Small business employers can and should monitor outsourced payroll tax deposits
2. New law gives businesses, individuals more time to challenge a wrongful IRS levy

1.  Small business employers can and should monitor outsourced payroll tax deposits

Many small business employers hire third-party payroll service providers to perform their payroll processing functions and tax-related duties, including making employment tax deposits through the Electronic Federal Tax Payment System (EFTPS). EFTPS is a free, easy to use, and convenient way to pay all federal taxes through a secure government website.

It is important small businesses monitor their tax deposits as they, generally, remain liable for any unpaid employment taxes. This includes any penalties and interest resulting from underpayment, even if they use a third-party payroll service provider.

Note: this may not apply to employers using Certified Professional Employer Organizations.

Tips to help employers meet their employment tax responsibilities:

• Establish an EFTPS account to monitor deposits.
• Sign up for email notifications on EFTPS.gov.
• Contact the third-party payroll service provider immediately regarding incorrect or missing tax deposits.

Employers can visit Outsourcing payroll and third-party payers on IRS.gov, the EFTPS.gov website, and watch the video Monitoring your outsourced payroll duties on EFTPS for more information.

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2.  New law gives businesses, individuals more time to challenge a wrongful IRS levy

Businesses and individuals have additional time to file an administrative claim or bring a civil action for wrongful levy or seizure, according to the Internal Revenue Service. The Tax Cuts and Jobs Act of 2017, the tax reform law enacted in December, extended the time limit for filing an administrative claim and for bringing a suit for wrongful levy from nine months to two years.

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