The federal government has been busy adding to its regulatory agenda. Here’s the latest news from the regulations front.
1. New Form I-9. Beginning May 7, 2013, employers must begin using a new Form I-9, which carries a “03/08/13 N” notation in the bottom left corner. Use it for new hires or current employees who must be reverified. Forms with revision dates of (08-07-09) Y and (02/02/09) N will become obsolete.
The newly revised form adds data fields, including the employee’s phone number and email address, improves the instructions and expands the form’s format to two pages. Employers with electronic forms must modify their electronic systems to accommodate these changes. Download the new form and read all about the latest changes in "Feds publish revised I-9 form; employers must start using it by May 7." (78 F.R. 15030, 3-8-13)
2. Proposed regs on truncated TINs. Proposed regulations would implement on a permanent and voluntary basis the IRS’ pilot project that allowed filers of most Forms 1099 to truncate the first five digits of a payee’s Taxpayer Identification Number (TIN).
The regs propose to call these truncated numbers TTINs, and they would substitute for a payee’s Social Security number, Individual Taxpayer Identification number or Adoption Taxpayer Identification number. Truncation would not apply to Employer Identification Numbers.
Consistent with the pilot project, TTINs couldn’t be included on the IRS’ copies, and would look like this: XXX-XX-1234 or ***-**-1234. Where the pilot project only allowed TINs on payees’ paper copies to be truncated, the proposed regs would allow TTINs on employees’ electronic copies, as well. The regs clarify that payers can’t truncate their own TINs. These regs won’t become effective until final regs are issued. (78 F.R. 913, 1-7-13)
3. Proposed regs on payroll agents. Employee leasing organizations fall through the payroll liability cracks because they don’t control the payment of wages, aren’t agents who have obtained an approved Form 2678 or aren’t payroll reporting agents, such as a payroll service bureau.
Proposed regs remedy this situation by allowing the IRS to designate an employee leasing organization as a client-employer’s agent for all payroll purposes, if, under an oral or written agreement between the parties, the leasing organization asserts that it:
- Is the employer or co-employer of individuals who work for the client-employer
- Pays wages to these employees, and
- Assumes responsibility to collect, report and pay, or assumes liability for any payroll taxes with respect to wages paid to these employees.
As agents, leasing organizations could be liable to the IRS if they fail to file returns or deposit a client’s payroll taxes. However, the regs note that client-employers are still ultimately liable for their payroll taxes. The regs won’t become effective until final regs are issued. (78 F.R. 6056, 1-29-13)
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