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.

Q: What does Preamble of 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. do?

This bill proposes to amend the Internal Revenue Code of 1986. The amendment aims to establish procedures related to the attribution of errors involving third-party payors of payroll taxes. The bill's stated purpose is 'to establish procedures relating to the attribution of errors in the case of third party payors of payroll taxes, and for other purposes.'

Q: What does ATTRIBUTION OF ERRORS IN THE CASE OF THIRD PARTY PAYORS OF of 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. do?

This section amends the Internal Revenue Code of 1986 by adding a new section 3513 concerning third party payors of payroll taxes. Third party payors may rely on certifications from employers unless they have constructive knowledge of an error. If a third party payor has constructive knowledge of an error, both the employer and the third party payor are responsible for the liability, with the third party's responsibility limited to the portion attributable to their knowledge. If a third party payor lacks constructive knowledge, the employer bears sole responsibility for any liability arising from the error. The Secretary cannot delay processing payroll tax credits or initiate audits solely because a third party payor filed an erroneous return relying on another employer's certification. The Secretary may require third party payors to provide information related to employers. Constructive knowledge means the third party payor knew or should have known of an error. A third party payor is deemed not to have constructive knowledge regarding a payroll tax credit if the certification states the employer is entitled, the third party accurately reported the credit, and the amount of aggregate wages was verified.

Last updated: 5/6/2025 · Introduced: 5/6/2025

Author: Mike Thompson (D-CA)

TL;DR (AI)

This bill establishes procedures for allocating responsibility when payroll tax errors occur, specifically addressing situations involving third-party payors.
Third-party payors can rely on employer certifications regarding payroll taxes, but are liable for errors if they have constructive knowledge.
The bill prevents the IRS from delaying tax credit processing or initiating audits solely due to a third-party payor's reliance on an employer's certification.

119th Congressin committeeOfficial page

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Includes provisions on preamble, attribution of errors in the case of third party payors of.

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