IRS certification of professional employer organizations to begin July 1, 2016

Tax Hot Topics: IRS certification of professional employer organizationsThe IRS plans to begin accepting applications for professional employer organization (PEO) certification beginning July 1, 2016. The Tax Increase Prevention Act of 2014, enacted on Dec. 19, 2014, requires the IRS to establish a voluntary certification program for PEOs. Since the law’s enactment, the IRS has been working to identify and define the policy, procedural and information system changes necessary to meet the requirements of the new law.

As part of the certification program, the IRS is required to complete background, credit and tax compliance checks of PEOs; verify the PEO has an active and approved surety bond; verify the PEO satisfies the service agreement and financial review requirements; collect a user fee; and provide public disclosure of certified PEOs and any PEOs whose certification has been suspended or revoked.

Eddie Adkins
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Jeffrey Martin
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