Three tips for employers outsourcing their payroll.

• Position: IRS NEWS

Recent prosecutions of individuals and companies that--acting under the guise of a payroll service provider have stolen funds intended for payment of employment taxes makes it important that employers who outsource payroll are aware of the following tips from the IRS:

1. Employer Responsibility: The employer is ultimately responsible for the deposit and payment of federal tax liabilities. Even though you forward the tax payments to the third party to make the tax deposits, you the employer--are the responsible party If the third party fails to make the federal tax payments, the IRS may assess penalties and interest. The employer is liable for all taxes, penalties and interest due. The IRS can also hold you personally liable for certain unpaid federal taxes.

2. Correspondence: If...