The IRS has issued Rev. Proc. 2016-33 to provide additional
details on how a business entity can become certified under the
IRS's new certified professional employer organization (CPEO)
program. This revenue procedure supplements
temporary and proposed regulations published by the IRS in May.
To become and remain certified under the new program, CPEOs must
meet tax status, background, experience, business location,
financial reporting, bonding and other requirements.
Under the revenue procedure, interested applicants will be required
to apply electronically and submit supporting documents through a
new online system. Paper applications will not be accepted. A
$1,000 application fee must be paid using Pay.gov. The revenue
procedure also includes detailed information on bond, financial
audit and other requirements.
According to the IRS, the new online application system will be
accessible on IRS.gov in coming weeks, and the IRS will be ready to
accept application materials beginning on July 1, 2016. The
effective date of certification for an applicant that submits a
complete and accurate application before Sept. 1, 2016, and is
certified, will be Jan. 1, 2017, even in situations where the
certification letter is not issued until after that date. The IRS
will publish a list of CPEOs on its website, and the list will be
updated quarterly.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
