Information sought on professional employer organizations’ practices

The IRS is requesting information about professional employer organization practices in an effort to streamline the implementation of a new federal program. The IRS is required to establish a voluntary certification program for professional employer organizations (PEOs) by the Stephen Beck, Jr., Achieving a Better Life Experience (ABLE) Act of 2014, enacted as part of the Tax Increase Prevention Act of 2014 (P.L. 113-295). The law requires PEOs to meet a number of requirements, including certain bond and independent financial review requirements.

Currently, PEOs are subject to licensing, registration and other requirements in many states. In addition, there are private assurance organizations that offer PEOs accreditation if they satisfy certain requirements. The IRS is requesting information related to these state requirements and accreditation programs.

Specific topics of interest include covered employees, financial audit practices, verification of payroll tax obligations, and working capital and net worth requirements. The IRS will also welcome for further consideration information on other industry practices. The IRS plans to begin accepting applications for PEO certification on July 1, 2016.

The deadline for submissions is January 8, 2016. Information may be submitted electronically at or in writing to: Internal Revenue Service, 1111 Constitution Avenue NW., Room 3406, Washington, D.C. 20224-0002, Attn: SBSE ABLE CPEO. (IR-2015-127, November 18, 2015.)

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