To amend the Internal Revenue Code of 1986 to establish procedures relating to the attribution of errors in the case of third party payors of payroll taxes, and for other purposes.

Key Points

• This bill changes how the government handles mistakes on payroll taxes when a company uses an outside service to handle their paychecks. It clarifies who has to pay the IRS if there is an error in the tax paperwork.
• Under the new rules, a payroll service can trust the information an employer gives them. If the employer provides wrong information, the employer is the one held responsible for any back taxes or penalties.
• The payroll service is only responsible if they knew or should have known the information was wrong. This protects these services from being punished for mistakes made by the businesses they serve.
• The IRS would be stopped from delaying tax credits for one business just because their payroll provider made a mistake on a different client's taxes. This prevents innocent businesses from being caught up in someone else's audit.
• This policy aims to make the tax system fairer for small businesses and the companies that help them manage their employees. It ensures that the person who actually made the mistake is the one who has to fix it.

Impact Analysis

Govbase has not yet run an impact analysis on this legislation.